| Title: | Price determination in a simple market with and without short sales |
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| Authors: | ID Gehr, Adam K. (Author) |
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| Files: |  http://www.dlib.si/details/URN:NBN:SI:DOC-DRCIKHTP
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| Language: | English |
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| Work type: | Not categorized |
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| Typology: | 1.01 - Original Scientific Article |
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| Organization: | EPF - Faculty of Business and Economics
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| Abstract: | Miller (1977) argued that prohibiting or constraining short sales causes securities to be o verpriced because traders with low estimates of value do not participate in the market. Markets with short sales should, therefore, price securities correctly because all traders participate. This paper shows that Miller's (1977) result is not necessarily true. Even in the absence of short sales, securities may be overpriced, underpriced or correctly priced if bidders bid their estimate of the security's value. On the other hand, if short sales are allowed, the market will consistently exhibit underpricing. We also show how bidders may adjust their bids to account for the presence of the bias. |
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| Keywords: | prodaja, trg, dražbe, cene |
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| Publisher: | Društvo ekonomistov Maribor |
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| Year of publishing: | 2010 |
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| Number of pages: | str. 3-10 |
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| Numbering: | Letn. 56, št. 3/4 |
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| PID: | 20.500.12556/DKUM-52362  |
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| UDC: | 336.763/.764:336.741.23/.24 |
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| ISSN on article: | 0547-3101 |
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| COBISS.SI-ID: | 10300188 |
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| NUK URN: | URN:SI:UM:DK:H2O7GFTC |
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| Publication date in DKUM: | 10.07.2015 |
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| Views: | 678 |
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| Downloads: | 46 |
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| Metadata: |    |
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| Categories: | Misc.
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