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Cited by 2,192

The DOI matches its Crossref record.

Positive Feedback Investment Strategies and Destabilizing Rational Speculation

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DE LONG, J. BRADFORD, SHLEIFER, ANDREI, SUMMERS, LAWRENCE H., WALDMANN, ROBERT J.·1990·The Journal of Finance
DOI 10.1111/j.1540-6261.1990.tb03695.x
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Abstract

Analyses of rational speculation usually presume that it dampens fluctuations caused by “noise” traders. This is not necessarily the case if noise traders follow positive‐feedback strategies—buy when prices rise and sell when prices fall. It may pay to jump on the bandwagon and purchase ahead of noise demand. If rational speculators' early buying triggers positive‐feedback trading, then an increase in the number of forward‐looking speculators can increase volatility about fundamentals. This model is consistent with a number of empirical observations about the correlation of asset returns, the overreaction of prices to news, price bubbles, and expectations.

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Metadata

Authors
DE LONG, J. B., SHLEIFER, A., SUMMERS, L. H., & WALDMANN, R. J.
Venue
The Journal of Finance
Publisher
Wiley
Published
1990-06
Volume
45
Issue
2
Pages
379-395
ISSN
  • 0022-1082 (ISSN-L)
  • 1540-6261
DOI
10.1111/j.1540-6261.1990.tb03695.x
OpenAlex
W3124305668
Cited by
2,192
References
0
FWCI
24.59
Type
journal article
Language
en
Open access
green

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CoChat. (2026). Citation check: Positive Feedback Investment Strategies and Destabilizing Rational Speculation. https://app.cochat.ai/papers/10.1111/j.1540-6261.1990.tb03695.x
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DE LONG, J. B., SHLEIFER, A., SUMMERS, L. H., & WALDMANN, R. J. (1990). Positive Feedback Investment Strategies and Destabilizing Rational Speculation. The Journal of Finance. https://doi.org/10.1111/j.1540-6261.1990.tb03695.x

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Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.