TY  - JOUR
TI  - Predators and Prey on Wall Street
AB  - 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.
SP  - 1
EP  - 38
UR  - http://raps.oxfordjournals.org/content/4/1/1.abstract
PY  - 2014-01-01
JO  - Review of Asset Pricing Studies
AU  - Chaderina, Maria 
AU  - Green, Richard 
ER -