Regulating Irrational Exuberance and Anxiety in Securities Markets
AbstractThis paper analyzes the regulatory implications of irrational exuberance and anxiety in securities markets. U.S. federal securities laws mandate the disclosure of certain information, but regulate only the cognitive form and content of that information. An important and unstudied question is how to regulate securities markets where some investors respond not only cognitively to the form and content of information, but also emotionally to the form and content of information. This paper investigates that question when some investors feel exuberance or anxiety that is unjustified by cognitive processing of the available information. This paper develops the implications for mandatory securities disclosure of irrational exuberance and anxiety.
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Bibliographic InfoPaper provided by University of Pennsylvania Law School in its series Scholarship at Penn Law with number upenn_wps-1016.
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Anxiety; irrational exuberance; mandatory disclosures; securities regulation;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-08-02 (All new papers)
- NEP-FMK-2004-08-02 (Financial Markets)
- NEP-LAW-2004-08-02 (Law & Economics)
- NEP-REG-2004-08-02 (Regulation)
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