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Asset Price Dynamics with Local Interactions under Heterogeneous Beliefs
2007
Social Science Research Network
This paper investigates the effect of network structure on the asset price dynamics. We propose a simple present value discounted asset pricing model with heterogeneous agents. Every period the agents choose a predictor of the future price on the basis of past performance of their own and alternative strategies and form their demands for a risky asset. The information about the performance of an alter- * We thank the participants of the workshop "Ten years of CeNDEF" for their comments and
doi:10.2139/ssrn.1288281
fatcat:e7pmmcmpmzdw3gnu37ee6npsoa