Liquidity Preference and Information
نویسنده
چکیده
This note explores the link between anticipated information and a preference for liquidity in investment choices. Given a subjective ordering of investment portfolios by their liquidity, we identify a sufficient condition under which the prospect of finer resolution of uncertainty creates a preference for more liquid positions. We then show how this condition might arise naturally in some standard classes of sequential decision problems. JEL Codes: D81, E41, G11
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