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One key element in the formation of bubble is access to information. Access to this information can be symmetric or asymmetric. Research has found that
One key element in the formation of bubble is access to information. Access to this information can be symmetric or asymmetric. Research has found that traders have an incentive to hold a bubble asset for longer, thereby expanding the bubble in a market with symmetric, rather than asymmetric information. As a corollary it was found that when traders are more experienced, the size of the bubble decreases, in which case bubbles do not arise, with symmetric information. However, the size of the bubble is stable in a market with asymmetric information. What is the implication of this finding to the US financial market
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