IDEAS home Printed from https://ideas.repec.org/a/eee/ecofin/v80y2025ics1062940825001603.html
   My bibliography  Save this article

Heterogeneous beliefs with information processing constraints and asset pricing in presence of non-tradable goods

Author

Listed:
  • Wang, Hailong
  • Hu, Duni

Abstract

This paper proposes an international financial model with two investors to explore the influences of heterogeneous beliefs and capacity constraints on asset prices. The capacity constraints not only impose influences on the investors’ posterior means and variances, but also generate persistent disagreements. We present that even though the non-tradable goods are only domestically consumed, the investors can partially mitigate their non-tradable goods consumption risks by adjusting tradable goods consumptions. We also show that introducing the non-tradable goods leads the investors’ optimal portfolio choices to depend on hedging demands motivated by uncertainties of the stocks with claims to the non-tradable goods. The previous mechanism of the non-tradable goods plays an important role in determining the effects of heterogeneous beliefs on asset pricing moments.

Suggested Citation

  • Wang, Hailong & Hu, Duni, 2025. "Heterogeneous beliefs with information processing constraints and asset pricing in presence of non-tradable goods," The North American Journal of Economics and Finance, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:ecofin:v:80:y:2025:i:c:s1062940825001603
    DOI: 10.1016/j.najef.2025.102520
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1062940825001603
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.najef.2025.102520?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecofin:v:80:y:2025:i:c:s1062940825001603. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620163 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.