Noise Trader and the Welfare Effects of Privatization

Simon Grant () and John Quiggin ()

Working Papers from Rice University, Department of Economics

Abstract: Excessive volatility of asset prices like that generated in the 'noise trader' model of De Long et al. is one factor that plausibly might contribute to an explanation of the equity premium. We extend the De Long et al. model to allow for privatization of publicly-owned assets and assess the welfare effects of such privatization in the presence of excess volatility arising from noise traders' mistaken beliefs.

JEL-codes: E62 (search for similar items in EconPapers)
Date: 2003-05
View list of references

Downloads: (external link)
http://www.ruf.rice.edu/~econ/papers/2003papers/03Grant.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ecl:riceco:2003-03

Access Statistics for this paper

More papers in Working Papers from Rice University, Department of Economics
Contact information at EDIRC.
Series data maintained by ().