Related papers: Rational Bubbles Attached to Real Assets
We investigate the parameter space of hybrid inflation models where inflation terminates via a first-order phase transition causing nucleation of bubbles. Such models experience a tension from the need to ensure nearly scale invariant…
A ``bubble universe'' nucleating in an eternally inflating false vacuum will experience, in the course of its expansion, collisions with an infinite number of other bubbles. In an idealized model, we calculate the rate of collisions around…
In the current environment of financial distress, many governments are likely to soon become major holders of financial assets, but the policy debate focuses only on the likelihood and extent of short-term market stabilization. This paper…
We study random utility (RU) rationality with aggregation when the underlying alternatives in each aggregate vary across consumers and are unobserved, as is typical for an outside option. RUM over the underlying alternatives is the natural…
The interaction of multiple bubbles is a complex physical problem. A simplified case of multiple bubbles is studied theoretically with a bubble located at the center of a circular bubble cluster. All bubbles in the cluster are equally…
Theories with compact extra dimensions are sometimes unstable to decay into a bubble of nothing -- an instability resulting in the destruction of spacetime. We investigate the existence of these bubbles in theories where the moduli fields…
Metastability is a phenomenon observed in stochastic systems which stay in a false-equilibrium within a region of its state space until the occurrence of a sequence of rare events that leads to an abrupt transition to a different region.…
We model the dynamics of asset prices and associated derivatives by consideration of the dynamics of the conditional probability density process for the value of an asset at some specified time in the future. In the case where the price…
Eternal inflation predicts our observable universe lies within a bubble (or pocket universe) embedded in a volume of inflating space. The interior of the bubble undergoes inflation and standard cosmology, while the bubble walls expand…
We present a dynamical many-body theory of money in which the value of money is a time dependent ``strategic variable'' that is chosen by the individual agents. The value of money in equilibrium is not fixed by the equations, and thus…
This work uncovers the low-dimensional nature the complex dynamics of actuated separated flows. Namely, motivated by the problem of model-based predictive control of separated flows, we identify the requirements on a model-based observer…
The inertial collapse of two interacting and non-translating spherical bubbles of equal size is considered. The exact analytic solution to the nonlinear ordinary differential equation that governs the bubble radii during collapse is first…
We investigate the hydrodynamic solutions for expanding bubbles in cosmological first-order phase transitions going beyond local thermal equilibrium approximation. Under the assumption of a tangenosidal field profile, we supplement the…
As we show by using notions of equilibrium in infinite sequential games, crashes or financial escalations are rational for economic or environmental agents, who have a vision of an infinite world. This contradicts a picture of a…
For a rational number $q$, a rational $D(q)$-$n$-tuple is a set of $n$ distinct nonzero rationals $\{a_1, a_2, \dots, a_n\}$ such that $a_ia_j+q$ is a rational square for all $1 \leqslant i < j \leqslant n$. For every $q$ we find all…
We consider the pricing of derivatives in a setting with trading restrictions, but without any probabilistic assumptions on the underlying model, in discrete and continuous time. In particular, we assume that European put or call options…
In a model with no given probability measure, we consider asset pricing in the presence of frictions and other imperfections and characterize the property of coherent pricing, a notion related to (but much weaker than) the no arbitrage…
A deterministic trading strategy by a representative investor on a single market asset, which generates complex and realistic returns with its first four moments similar to the empirical values of European stock indices, is used to simulate…
A simple statement and accessible proof of a version of the Fundamental Theorem of Asset Pricing in discrete time is provided. Careful distinction is made between prices and cash flows in order to provide uniform treatment of all…
We present an interacting-agent model of speculative activity explaining bubbles and crashes in stock markets. We describe stock markets through an infinite-range Ising model to formulate the tendency of traders getting influenced by the…