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dc.contributor.authorVeldkamp, Laura-
dc.contributor.authorNieuwerburgh, Van-
dc.date.accessioned2008-05-20T11:34:04Z-
dc.date.available2008-05-20T11:34:04Z-
dc.date.issued2008-04-19-
dc.identifier.urihttp://hdl.handle.net/2451/26146-
dc.description.abstractMany argue that home bias arises because home investors can predict home asset payoffs more accurately than foreigners can. But why doesn't global information access eliminate this asymmetry? We model investors, endowed with a small home information advantage, who choose what information to learn before they invest. Surprisingly, even when home investors can learn what foreigners know, they choose not to: Investors pro¯t more from knowing information others do not know. Learning amplifies information asymmetry. The model matches patterns of local and industry bias, foreign investments, portfolio out-performance and asset prices. Finally, we propose new avenues for empirical research.en
dc.language.isoen_USen
dc.relation.ispartofseriesEC-04-32en
dc.subjectHome biasen
dc.subjectasymmetric informationen
dc.subjectlearningen
dc.titleInformation Immobility and the Home Bias Puzzleen
dc.typeWorking Paperen
Appears in Collections:Economics Working Papers

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