• Graduate program
  • Research
  • News
  • Events
    • Summer School
      • Climate Change
      • Gender in Society
      • Inequalities in Health and Healthcare
      • Business Data Science Summer School Program
      • Receive updates
    • Events Calendar
    • Events Archive
    • Tinbergen Institute Lectures
    • Conference: Consumer Search and Markets
    • Annual Tinbergen Institute Conference
  • Summer School
    • Climate Change
    • Gender in Society
    • Inequalities in Health and Healthcare
    • Business Data Science Summer School Program
    • Receive updates
  • Alumni
  • Magazine
Home | Events Archive | The effects of seasoned equity offerings and share buybacks: Insights from Heterogeneous Asset Pricing Models
Seminar

The effects of seasoned equity offerings and share buybacks: Insights from Heterogeneous Asset Pricing Models

  • Location
    University of Amsterdam, Roetersstraat 11, room E5.22
    Amsterdam
  • Date and time

    December 14, 2023
    12:00 - 13:00

Abstract

We propose an asset pricing model with heterogeneous agents, asynchronous updating of beliefs, a market maker, and a firm that issues or buys back its own shares to exploit mispricing. The deterministic skeleton of the model is a two-dimensional piecewise-smooth map. We present an analytical study of the fundamental equilibrium and the coexisting non-fundamental equilibria. In comparison to Hommes et al. (2005), the firm's trading helps to dampen the extreme price realizations in the chaotic region of the model. The trading activities benefit the firm, generating growth in its value over time. The same firm engagement in a Walrasian market can exacerbate the price dynamics.