Heterogeneous Beliefs, Rare Disasters, and Asset Pricing
We illustrate the effects of heterogeneous beliefs about disasters on the equity premium and individual agents' trading activities. When investors disagree about the chances or severity of disasters, those optimistic investors may insure the pessimists against their disaster risk exposure. Due...
| Main Authors: | , , |
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| Other Authors: | |
| Format: | Article |
| Language: | English |
| Published: |
American Economic Association,
2011-12-06T16:37:02Z.
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| Subjects: | |
| Online Access: | Get fulltext |