Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 7, 2023 erstellt
Description:
In this study, the sole rational implementation of risk sharing is shown to require simultaneity of the presence, in markets of each of safe, high risk, and low risk assets. In context of the said implementation, market efficiency - which yet may deteriorate or improve - is optimized by searches for low risk assets whose 'information ratios' are better than those of the high risk assets that listed in the same markets in the course of the immediately preceding period. It is not then the Law of Large Numbers that is the source of market efficiency, but rather the 'structure of innovation' that subsists in real sectors, namely the extent to which efforts equally are applied to the fostering of innovations in the industries that are the natural domiciles for each of high or low risk assets. Since deteriorations to market efficiency then are induced by the inadequacies of the parameters of low risk assets, there is arrival at a pragmatic non-dominated equilibrium