Does increasing the traders' understanding of the functioning of financial markets lead to rational expectations equilibrium? We provide an answer by studying a simple exchange economy with complete markets and asymmetric information. Each trader is either a fundamentalist, who knows the...

Does increasing the traders' understanding of the functioning of financial markets lead to rational expectations equilibrium? We provide an answer by studying a simple exchange economy with complete markets and asymmetric information. Each trader is either a fundamentalist, who knows the...