tag:blogger.com,1999:blog-5880610.post9144630793298533632..comments2024-01-13T18:57:18.243-05:00Comments on Information Processing: Tyler Cowen and rationalitySteve Hsuhttp://www.blogger.com/profile/02428333897272913660noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-5880610.post-1529942924595703432007-08-30T01:18:00.000-04:002007-08-30T01:18:00.000-04:00vo: I think they consider an idealized "perfect ca...vo: I think they consider an idealized "perfect capital market" world in which the trader who "knows" that the correct price is $30 can lever up by borrowing, so in effect has infinite capital available. It's all unrealistic nonsense, of course.Steve Hsuhttps://www.blogger.com/profile/02428333897272913660noreply@blogger.comtag:blogger.com,1999:blog-5880610.post-10752142655340522042007-08-30T00:21:00.000-04:002007-08-30T00:21:00.000-04:00> With perfect capital markets, the one rational i...> With perfect capital markets, the one rational individual will overwhelm the influence of the irrational on stock prices. If the stock ought to be worth $30 a share, but irrational "noise traders" push it down to $20 a share, the person who knows better will keep on buying shares until the price has risen to $30.<BR/><BR/><BR/>Not necessarily so. This statement assumes the said individual has Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5880610.post-26148621920197397602007-08-30T00:04:00.000-04:002007-08-30T00:04:00.000-04:00testtestAnonymousnoreply@blogger.com