haku: @indexterm entry conditions / yhteensä: 180
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| Tekijä: | Hau, H. |
| Otsikko: | Competitive entry and endogenous risk in the foreign exchange market |
| Lehti: | Review of Financial Studies
1998 : WINTER, VOL. 11:4, p. 757-787 |
| Asiasana: | ENTRY CONDITIONS COMPETITION RISK FOREIGN INVESTMENT |
| Kieli: | eng |
| Tiivistelmä: | Higher trader participation increases exchange rate volatility. To investigate this linkage, this paper develops a dynamic model of endogenous entry of traders subject to heterogenous expectational errors. Entry of a marginal trader into the market increases the capacity of the market to absorb exogenous supply risk, and at the same time it adds noise and endogenous trading risk. The competitive entry equilibrium is characterized by excessive market entry and excessively volatile prices. |
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