Noise Trader Risk and the Political Economy of Privatization

S. Grant, J. Quiggin

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Abstract

The 'noise trader' model of De Long et al. provides a plausible account of the determination of the equity premium.Extension of the model to allow for privatization of publicly-owned assets yields insights into the positive political economy of privatization and into the normative question of how policies should be evaluated in the presence of mistaken beliefs.
Original languageEnglish
Place of PublicationTilburg
PublisherMicroeconomics
Number of pages16
Volume2001-104
Publication statusPublished - 2001

Publication series

NameCentER Discussion Paper
Volume2001-104

Keywords

  • risk
  • privatization
  • political economy
  • noise trader

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