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Challenges to a Policy Treatment of Speculative Trading Motivated by Differences in Beliefs

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  • Darrell Duffie

Abstract

This paper discusses the challenges faced by a policy treatment of speculative trading motivated by differences in beliefs.

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  • Darrell Duffie, 2014. "Challenges to a Policy Treatment of Speculative Trading Motivated by Differences in Beliefs," Economics Working Papers 14106, Hoover Institution, Stanford University.
    • Handle: RePEc:hoo:wpaper:14106
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    References listed on IDEAS

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    1. Alp Simsek, 2013. "Speculation and Risk Sharing with New Financial Assets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 1365-1396.
    2. Morris, Stephen, 1995. "The Common Prior Assumption in Economic Theory," Economics and Philosophy, Cambridge University Press, vol. 11(2), pages 227-253, October.
    3. Machina, Mark J & Schmeidler, David, 1992. "A More Robust Definition of Subjective Probability," Econometrica, Econometric Society, vol. 60(4), pages 745-780, July.
    4. Gabrielle Gayer & Itzhak Gilboa & Larry Samuelson & David Schmeidler, 2014. "Pareto Efficiency with Different Beliefs," The Journal of Legal Studies, University of Chicago Press, vol. 43(S2), pages 151-171.
    5. Karni, Edi & Schmeidler, David & Vind, Karl, 1983. "On State Dependent Preferences and Subjective Probabilities," Econometrica, Econometric Society, vol. 51(4), pages 1021-1031, July.
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    Cited by:

    1. Haddad, Valentin & Ho, Paul & Loualiche, Erik, 2022. "Bubbles and the value of innovation," Journal of Financial Economics, Elsevier, vol. 145(1), pages 69-84.
    2. Liebrich M. HIEMSTRA, 2022. "The Financial Side of Energy Markets in the Low-Carbon Transition," RSCAS Working Papers 2022/50, European University Institute.
    3. Eduardo Dávila, 2023. "Optimal Financial Transaction Taxes," Journal of Finance, American Finance Association, vol. 78(1), pages 5-61, February.
    4. Sprumont, Yves, 2018. "Belief-weighted Nash aggregation of Savage preferences," Journal of Economic Theory, Elsevier, vol. 178(C), pages 222-245.
    5. Blume, Lawrence E. & Cogley, Timothy & Easley, David A. & Sargent, Thomas J. & Tsyrennikov, Viktor, 2018. "A case for incomplete markets," Journal of Economic Theory, Elsevier, vol. 178(C), pages 191-221.
    6. Eric A. Posner & E. Glen Weyl, 2014. "Benefit-Cost Paradigms in Financial Regulation," The Journal of Legal Studies, University of Chicago Press, vol. 43(S2), pages 1-34.
    7. Motolese, Maurizio & Nakata, Hiroyuki, 2024. "Are macroeconomic indices fool's gold?," Journal of Economic Behavior & Organization, Elsevier, vol. 217(C), pages 240-260.
    8. Crès, Hervé & Tvede, Mich, 2018. "Regulation of trades based on differences in beliefs," European Economic Review, Elsevier, vol. 101(C), pages 133-141.
    9. Arnold, Lutz G. & Brunner, Stephan, 2015. "The economics of rational speculation in the presence of positive feedback trading," The Quarterly Review of Economics and Finance, Elsevier, vol. 57(C), pages 161-174.
    10. Steven D. Baker & Burton Hollifield & Emilio Osambela, 2018. "Preventing Controversial Catastrophes," Finance and Economics Discussion Series 2018-052, Board of Governors of the Federal Reserve System (U.S.).
    11. Pivato, Marcus, 2022. "Bayesian social aggregation with accumulating evidence," Journal of Economic Theory, Elsevier, vol. 200(C).
    12. Martin T. Bohl & Martin Stefan & Claudia Wellenreuther, 2019. "An Introduction to ESMA’s Commitments of Traders Reports: Do Hedgers Really Hedge?," CQE Working Papers 8619, Center for Quantitative Economics (CQE), University of Muenster.

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