An Information Based Explanation of the Domestic Bias in International Equity Investment
用信息不对称解释国际股票投资中的本土偏好现象，建立了一个噪声理性预期模型，证明当投资者平均更了解本国股票时，本土偏好会自然出现。
The domestic bias in international equity investment presents a major challenge to asset pricing models building on the assumption of symmetrically informed investors. Some further evidenc e on the home bias is provided and the question of why foreign exchang e risk or capital controls are not sufficient to explain the full effe ct is discussed. A simple noisy rational expectations model is introduc ed where, even in equilibrium, investors remain incompletely informed. It is shown that the domestic bias arises quite naturally when investor s are on average better informed about domestic stocks. Copyright 1993 by The editors of the Scandinavian Journal of Economics.