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Bear Raids and Short Sale Bans: Is Government Intervention Justifiable?

Author

Listed:
  • Richmond Mathews

    (Duke University)

  • Naveen Khanna

    (Michigan State University)

Abstract

incur significant trading losses in the process. We find that for a large enough existing stake, the value of ensuring the right decision offsets these trading losses. However, when his existing stake is inadequate, short sellers succeed in destroying value. Whether this justifies intervention depends on the expected value loss from inefficient decisions versus the costs of intervention.

Suggested Citation

  • Richmond Mathews & Naveen Khanna, 2010. "Bear Raids and Short Sale Bans: Is Government Intervention Justifiable?," 2010 Meeting Papers 165, Society for Economic Dynamics.
    • Handle: RePEc:red:sed010:165
    as

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    References listed on IDEAS

    as
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