Date of Award

2011

Document Type

Dissertation/Thesis

Submission Date

October 2026

Thesis/Dissertation Advisor [Chair]

Jakee, Keith

Abstract

The existence of market bubbles raises questions about economists‘ long held assumptions of rationality, costless arbitrage, and the efficient market hypothesis. I take a theoretical approach to the debate on market efficiency by modeling a ―no-value asset,‖ which are residential vacant lots that cannot be developed. I employ a data set that naturally controls for a number of market characteristics thought to contribute to inefficiency. I find that no-value assets traded persistently during the market upturn, in the early 2000s, suggesting limits to arbitrage. In the absence of inefficiency-causing market characteristics, the behavior of agents is likely the cause. To corroborate this claim, I create an investor confidence index using a ratio of sales to stressed sales and find that inefficiencies were present when investor confidence was high, supporting the idea of “irrational exuberance” on the part of traders.

Comments

Includes bibliography.

Extent

45 p.

Identifier

FA00003608_0

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