Investment choices: Indivisible non-marketable assets and suboptimal solutions

Pierpaolo Pattitoni and Marco Savioli

Economic Modelling, 2011, vol. 28, issue 6, 2387-2394

Abstract: Several investment decisions deal with non-marketable assets. Non-marketable assets are available only to one investor and are often indivisible. This has relevant consequences on investor investment opportunities. Adhering to a mean–variance representation of the investment space and considering a non-marketable asset (divisible or not), we derive some possible investment scenarios an investor may face. Furthermore, we show how a limited ability to gather and process information affects investor portfolio choices. Our results define a set of conditions under which the non-marketable asset represents a good investment and show that, under certain assumptions, the efficient frontier exhibits non-linearities and intervals of discontinuity.

Keywords: Portfolio Choice; Investment Decisions; Asset Indivisibility; Non-marketable Assets; Suboptimal Solutions (search for similar items in EconPapers)
JEL-codes: D81 G11 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:28:y:2011:i:6:p:2387-2394

DOI: 10.1016/j.econmod.2011.06.027

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