To make high-quality research more accessible and easier to explore.

Fields:

Disagreement, tastes, and asset prices

Journal of Financial Economics 2007 83(3), 667-689
Standard asset pricing models assume that: (i) there is complete agreement among investors about probability distributions of future payoffs on assets; and (ii) investors choose asset holdings based solely on anticipated payoffs; that is, investment assets are not also consumption goods. Both assumptions are unrealistic. We provide a simple framework for studying how disagreement and tastes for assets as consumption goods can affect asset prices.