Arnold, Lutz G. and Zelzner, Sebastian (2022) Financial trading versus entrepreneurship: Competition for talent and negative feedback effects. QUARTERLY REVIEW OF ECONOMICS AND FINANCE, 86. pp. 186-199. ISSN 1062-9769, 1878-4259
Full text not available from this repository. (Request a copy)Abstract
Higher market efficiency due to informed financial trading is typically considered to have positive feedback effects on the real economy. We extend the seminal Grossman-Stiglitz (1980) model to highlight an im-portant negative feedback effect from trading to entrepreneurial activity: information revelation via prices leads to a clustering of risk at entrepreneurs. This distorts agents' occupational choice between financial trading and entrepreneurship, discouraging real economic activity. This negative feedback effect provides explanations for excessive financial trading and multiplicity of equilibria.(c) 2022 Published by Elsevier Inc. on behalf of Board of Trustees of the University of Illinois.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | SOCIAL VALUE; INFORMATION; MARKETS; GROWTH; EFFICIENCY; AGGREGATION; PRIVATE; DESIGN; CAREER; CHOICE; Market efficiency; Asymmetric information; Allocation of talent; Occupational choice; Feedback effects |
| Subjects: | 300 Social sciences > 330 Economics |
| Divisions: | Business, Economics and Information Systems > Institut für Volkswirtschaftslehre und Ökonometrie > Lehrstuhl für Theoretische Volkswirtschaft (Prof. Dr. Lutz Arnold) |
| Depositing User: | Dr. Gernot Deinzer |
| Date Deposited: | 26 Jan 2024 06:38 |
| Last Modified: | 29 Jan 2024 13:53 |
| URI: | https://pred.uni-regensburg.de/id/eprint/57230 |
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