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The pricing kernel puzzle: A behavioral explanation.

Authors :
Siddiqi, Hammad
Quiggin, John
McMillan, David
Source :
Cogent Economics & Finance; Jan2019, Vol. 7 Issue 1, p1-10, 10p
Publication Year :
2019

Abstract

We show that if sophisticated institutional managers and individual investors perceive tail-risks differently, then a new explanation for the pricing kernel puzzle emerges. We show, by example, that even a tiny difference in tail-risk perception by the two investor types can explain the pricing kernel puzzle. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
23322039
Volume :
7
Issue :
1
Database :
Complementary Index
Journal :
Cogent Economics & Finance
Publication Type :
Academic Journal
Accession number :
141193727
Full Text :
https://doi.org/10.1080/23322039.2019.1684609