chorus of the tragedy which plays on the world stage. The main thesis of our work is that,despite the triumphant rhetoric praising the merits of perfect competition, the global fields ofthe dysfunctional market system have mushroomed in what we call Warrant Economics forthe Free-Market...

By allowing for imperfectly informed markets and the role of private information, we offer newinsights about observed deviations of portfolio concentrations in domestic relative to foreignrisky assets, or “home bias”, from what standard finance models predict. Our model ascribesthe...