relation: https://publications.ut-capitole.fr/id/eprint/48073/
title: Imperfect Financial Markets and Investment Inefficiencies
creator: Albagli, Elias
creator: Hellwig, Christian
creator: Tsyvinski, Aleh
subject: B- ECONOMIE ET FINANCE
description: We analyze the consequences of noisy information aggregation for investment. Market imperfections create endogenous rents that cause overinvestment in upside risks and underinvestment in downside risks. In partial equilibrium, these inefficiencies are particularly severe if upside risks are coupled with easy scalability of investment. In general equilibrium, the shareholders' collective attempts to boost value of individual firms leads to a novel externality operating through price that amplifies investment distortions with downside risks but offsets distortions with upside risks.
publisher: American Economic Association
date: 2023-09
type: Article
type: PeerReviewed
format: text
language: en
identifier: https://publications.ut-capitole.fr/id/eprint/48073/1/wp_tse_891.pdf
identifier:   Albagli, Elias, Hellwig, Christian <https://www.idref.fr/190565152> and Tsyvinski, Aleh  (2023) Imperfect Financial Markets and Investment Inefficiencies.    American Economic Review, vol. 113 (n° 9).  pp. 2323-2354.       
relation: http://tse-fr.eu/pub/128188
relation: 10.1257/aer.20170725
identifier: 10.1257/aer.20170725
doi: 10.1257/aer.20170725
language: en