Herd on the Street: Informational Inefficiencies in a Market with Short‐Term Speculation

摘要: Standard models of informed speculation suggest that traders try to learn information others do not have. This result implicitly relies on the assumption speculators have long horizons, i.e., can hold asset forever. By contrast, we show if short they may herd same information, trying what other also know. There be multiple herding equilibria, and even choose study is completely unrelated fundamentals.