@techreport{NBERw10556,
 title = "Shakeouts and Market Crashes",
 author = "Alessandro Barbarino and Boyan Jovanovic",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "10556",
 year = "2004",
 month = "June",
 URL = "http://www.nber.org/papers/w10556",
 abstract = {Stock-market crashes tend to follow run-ups in prices. These episodes look like bubbles that gradually inflate and then suddenly burst. We show that such bubbles can form in a Zeira-Rob type of model in which demand size is uncertain. Two conditions are sufficient for this to happen: A declining hazard rate in the prior distribution over market size and a positively sloped supply of capital to the industry. For the period 1971-2001 we fit the model to the Telecom sector.},
}