01168nam a22001697a 4500 190323b xxu||||| |||| 00| 0 eng d 0304-405X Extrapolation and bubbles / by Nicholas Barberis, Robin Greenwood, Lawrence Jin, Andrei Shleifer Nicholas Barberis, Robin Greenwood, Lawrence Jin, Andrei Shleifer Amsterdam Elsevier August 2018 Pages 203-227 Journal of Financial Economics 129 (2) 0304-405X Abstract We present an extrapolative model of bubbles. In the model, many investors form their demand for a risky asset by weighing two signals—an average of the asset’s past price changes and the asset’s degree of overvaluation—and “waver” over time in the relative weight they put on them. The model predicts that good news about fundamentals can trigger large price bubbles, that bubbles will be accompanied by high trading volume, and that volume increases with past asset returns. We present empirical evidence that bears on some of the model’s distinctive predictions. Bubble Extrapolation Volume lcc SE 361359 361359 0 0 lcc 0 CL CL PER 2019-03-23 0 2019-03-23 00:00:00 2019-03-23 SE