Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 2001 erstellt
Description:
Within the finance literature there has been a growing interest in the effect of private individuals trading in financial markets. This literature has focused on the increased volatility and short-run momentum these traders introduce in markets, with little attention paid to the efficiency implications of their presence. This paper considers the role of micro investors in completing markets by allowing additional risky assets to be traded: Because of differing risk attitudes, micro traders provide financial support for securities that would otherwise not be brought to market. Thus, while these traders may introduce additional volatility in the market, their presence allows other investors to more fully insure against risk. The presence of micro traders can therefore be efficiency enhancing as the securities they demand help complete the market