Eroding market stability by proliferation of financial instruments

@inproceedings{Caccioli2009ErodingMS,
  title={Eroding market stability by proliferation of financial instruments},
  author={Fabio Caccioli and Matteo Marsili and Pierpaolo Vivo},
  year={2009}
}
We contrast Arbitrage Pricing Theory (APT), the theoretical basis for the development of financial instruments, with a dynamical picture of an interacting market, in a simple setting. The proliferation of financial instruments apparently provides more means for risk diversification, making the market more efficient and complete. In the simple market of… CONTINUE READING