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  • Christopher Smallwood


From the point of view of a practitioner, I found Professor Keane's paper interesting and stimulating. I do not agree with the arguments, mainly because the model I have in mind of the way in which the world really works is not consistent with the theoretical model which Keane is addressing. His puzzles and paradoxes do not seem to me to be particularly puzzling or paradoxical when certain unrealistic theoretica assumptions are relaxed. This paper provides a brief summary of some of Professor Keane's arguments; presents an alternative view of the way equity markets actually behave in the real world; and finally contrasts the implications of this alternative view with Professor Keane' own conclusions on such issues as managements' approach to investment decisions and executive renumeration packages.

Suggested Citation

  • Christopher Smallwood, 1995. "Comment," The European Journal of Finance, Taylor & Francis Journals, vol. 1(1), pages 21-25.
  • Handle: RePEc:taf:eurjfi:v:1:y:1995:i:1:p:21-25 DOI: 10.1080/13518479500000003

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