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- W2765704788 abstract "This paper investigates how a profit-maximizing asset originator can coordinate the information acquisition of investors with different expertise by means of asset bundling. Bundling is beneficial to the originator when it discourages investors from analyzing idiosyncratic risks and focuses their attention on aggregate risks. But it is optimal to sell aggregate risks separately in order to exploit investors' heterogeneous expertise in learning about them and thus lower the risk premium. This analysis rationalizes the common securitization practice of bundling loans by asset class, which is at odds with existing theories based on diversification. The analysis also offers an alternative perspective on conglomerate formation (a form of asset bundling), and its relation to empirical evidence in that context is discussed." @default.
- W2765704788 created "2017-11-10" @default.
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- W2765704788 date "2018-05-01" @default.
- W2765704788 modified "2023-09-25" @default.
- W2765704788 title "Asset bundling and information acquisition of investors with different expertise" @default.
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- W2765704788 doi "https://doi.org/10.1016/j.jet.2018.02.003" @default.
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