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A MODEL OF HETEROGENEOUS EXPECTATIONS AS A DETERMINANT OF SHORT SALES
Author(s) -
Peterson David R.,
Waldman Donald M.
Publication year - 1984
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.1984.tb00349.x
Subject(s) - ex ante , economics , stock (firearms) , stock market , econometrics , financial economics , monetary economics , business , macroeconomics , mechanical engineering , paleontology , horse , biology , engineering
This study examines the role of heterogeneous expectations as a determinant of short selling of common stock. A theoretical model demonstrates that the degree of heterogeneity of opinion and the number of investors in a market both positively influence short selling. This theory is substantiated empirically using ex‐ante data. Short selling is related directly to merger activity and the presence of options.