{"title":"Too good to be true: A theory","authors":"John R. Conlon , Feng Liu","doi":"10.1016/j.econlet.2024.111970","DOIUrl":null,"url":null,"abstract":"<div><div>We use a Gaussian mixture prior with two clusters to explain market fears. We show that a surprisingly positive signal can shake investors’ confidence in their understanding of the market, and in the process, potentially lower their expectation of an asset’s value.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"244 ","pages":"Article 111970"},"PeriodicalIF":2.1000,"publicationDate":"2024-09-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economics Letters","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0165176524004543","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
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Abstract
We use a Gaussian mixture prior with two clusters to explain market fears. We show that a surprisingly positive signal can shake investors’ confidence in their understanding of the market, and in the process, potentially lower their expectation of an asset’s value.
期刊介绍：
Many economists today are concerned by the proliferation of journals and the concomitant labyrinth of research to be conquered in order to reach the specific information they require. To combat this tendency, Economics Letters has been conceived and designed outside the realm of the traditional economics journal. As a Letters Journal, it consists of concise communications (letters) that provide a means of rapid and efficient dissemination of new results, models and methods in all fields of economic research.
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