Template-type: ReDif-Paper 1.0
Author-Name: Sanditov, Bulat
Author-Name: Cowan, Robin
Author-Name: Kool, Clemens
Author-workplace-name: MERIT
Title: Mutual Illusions and Financing New Technologies: Two-Sided Informational Cascades
Abstract: A model in which agents on both sides of the market are subject to informational cascades isexamined. In an uncertain environment with asymmetric information agents tend to beoveroptimistic about the state of the world, a result that fits with empirical evidence on financingnew technologies. This overoptimism based on mutual illusions makes the system vulnerable totwo-sided bubbles, and may be one of the reasons behind “dot com” crash.
Keywords: economics of technology ; 
Series: Research Memoranda
Creation-Date: 2002
Number: 007
File-URL: https://unu-merit.nl/publications/rmpdf/2002/rm2002-007.pdf
File-Format: application/pdf
File-Size: 281711
Handle: RePEc:unm:umamer:2002007