Chaderina, Maria, Green, Richard. 2014. Predators and Prey on Wall Street. Review of Asset Pricing Studies 4 (1): 1-38.
BibTeX
Abstract
Much financial activity is zero-sum. While providing transactional and diversification services to others, participants also prey upon each other. High-ability predators trade opportunistically with less-able prey. In our dynamic model these features amplify real shocks. The presence of more low-ability traders reduces expected losses to high-ability traders, leading to equilibria with high levels of financial activity and employment. Shocks to profits can motivate exit by low-ability traders, rendering those of intermediate skill more vulnerable. Thus, our relatively simple model generates boom-bust dynamics suggestive of Wall Street.
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Status of publication | Published |
---|---|
Affiliation | WU |
Type of publication | Journal article |
Journal | Review of Asset Pricing Studies |
WU-Journal-Rating new | FIN-A, WH-B |
Language | English |
Title | Predators and Prey on Wall Street |
Volume | 4 |
Number | 1 |
Year | 2014 |
Page from | 1 |
Page to | 38 |
Reviewed? | Y |
URL | http://raps.oxfordjournals.org/content/4/1/1.abstract |
Associations
- People
- Chaderina, Maria (Former researcher)
- External
- Green, Richard (Carnegie Mellon University, United States/USA)
- Organization
- Institute for Finance, Banking and Insurance IN (Details)