Short-covering bubbles

A-Tier
Journal: Journal of Economic Theory
Year: 2024
Volume: 219
Issue: C

Authors (2)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper argues that short selling might give rise to bubbles that would otherwise not exist. An asset with zero fundamental value might be traded at a positive price by rational agents. We call it a short-covering bubble because it is sustained by short-sellers covering their positions. Agents trade according to their beliefs on how long the bubble will persist.

Technical Details

RePEc Handle
repec:eee:jetheo:v:219:y:2024:i:c:s0022053124000528
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25