Psychological Aspects of Market Crashes

Patrick Leoni ()

Economics Department Working Paper Series from Department of Economics, National University of Ireland - Maynooth

Abstract: This paper analyzes the sensitivity of market crashes to investors'psychology in a standard general equilibrium framwork. Contrary to the traditional view that market crashes are driven by large drops in aggregate endowments, we argue from a theoretical standpoint that individual anticipations of such drops are a necessary condition for crashes to occur, and that the magnitude or such crashes are poritively correlated with the level of individual anticipations of drops

Pages: 23 pages
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://repec.maynoothuniversity.ie/mayecw-files/N1730407.pdf (application/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: https://EconPapers.repec.org/RePEc:may:mayecw:n1730407

Access Statistics for this paper

More papers in Economics Department Working Paper Series from Department of Economics, National University of Ireland - Maynooth Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).