Econometrica: May 2004, Volume 72, Issue 3

Simple Finite Horizon Bubbles Robust to Higher Order Knowledge
p. 927-936

John R. Conlon

An asymmetric information model of a finite horizon “th order” rational asset price bubble is presented, where (all agents know that) the asset is worthless. Also, the model has only two agents, so the first order version of the bubble is simpler than other first order bubbles in the literature.

Log In To View Full Content