A Network Value Theory of a Market, and Puzzles
By considering the stock market as a network that impounds liquidity and information production, the authors were able to study its influence on aggregate stock value and value from dividends. Market participants and practitioners impart value through the network of activity they form. The authors offer a network value model that can price this value and help solve such financial economic puzzles as the equity premium, stocks’ inverse inflation relationship, and lack of news.
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