R ≤ 11 ■ V
• ‘ ≤ β Ps, U-S-1)
for every security j as above. The right-hand side of Inequality (B) depends
on the parameters described in Proposition 3, together with the intertemporal
discount factor β and the coefficient of risk-aversion α. This last inequality
directly yields the numerical simulations presented in Section 4.
References
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[3] Hong, H., and J. Stein (2003) “Differences in Opinion, Short-Sales Con-
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Infinite-horizon Economies with Incomplete Markets, Journal of Eco-
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