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Simple Finite Horizon Bubbles Robust to Higher Order Knowledge
Author(s) -
Conlon John R.
Publication year - 2004
Publication title -
econometrica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 16.7
H-Index - 199
eISSN - 1468-0262
pISSN - 0012-9682
DOI - 10.1111/j.1468-0262.2004.00516.x
Subject(s) - order (exchange) , simple (philosophy) , asset (computer security) , bubble , horizon , mathematical economics , economic bubble , first order , economics , mathematics , computer science , finance , philosophy , geometry , computer security , epistemology , parallel computing
An asymmetric information model of a finite horizon “ n th order” rational asset price bubble is presented, where (all agents know that) n the asset is worthless. Also, the model has only two agents, so the first order version of the bubble is simpler than other first order bubbles in the literature.