1 option
Leverage and Asset Prices: An Experiment. / Marco Cipriani, Ana Fostel, Daniel Houser.
- Format:
- Book
- Author/Creator:
- Cipriani, Marco.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w26701.
- NBER working paper series no. w26701
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Leverage and Asset Prices
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2020.
- Summary:
- We develop a model of leverage that is amenable to laboratory implementation and gather experimental data. We compare two identical economies: in one economy, agents cannot borrow; in the other, they can leverage a risky asset to issue debt. Leverage increases asset prices in the laboratory. This increase is significant and quantitatively close to what theory predicts. Moreover, also as theory suggests, leverage allows gains from trade to be realized in the laboratory. Finally, the mechanism generating the price increase in the lab is due to the asset role as collateral, and different from what we would observe with a simple credit line or bigger cash endowments.
- Notes:
- Print version record
- January 2020.
The Penn Libraries is committed to describing library materials using current, accurate, and responsible language. If you discover outdated or inaccurate language, please fill out this feedback form to report it and suggest alternative language.