Investors' optimal response to stock price bubbles

Více o knize

The thesis explores the phenomenon of financial bubbles, which occur when asset prices significantly deviate from their intrinsic value, contradicting the efficient market hypothesis. It examines how initial price increases create positive expectations, attracting speculative buyers focused on short-term profits rather than the asset's underlying earnings. Historical examples include notable bubbles like the South Sea bubble, the Great Crash of 1929, and the recent housing bubble in the U.S. The work analyzes the role of economic variables in determining an asset's fundamental value.