The simplest rational greater-fool bubble model

Feng Liu and John Conlon

Journal of Economic Theory, 2018, vol. 175, issue C, 38-57

Abstract: We show that there exist models with rational agents, three periods, and five states of the world, which have a strong bubble in one of these states. However, no finite-horizon rational strong bubble model, with standard Walrasian markets, can have fewer than five states.

Keywords: Greater-fool bubble; Asymmetric information (search for similar items in EconPapers)
JEL-codes: D53 D82 D84 G12 G14 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:175:y:2018:i:c:p:38-57

DOI: 10.1016/j.jet.2018.01.001

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