In this thesis I present the idea to use the so-called log-periodic power law (LPPL) to identify the influence of larger exogenous shocks on investor behaviour during antibubbles. I apply this methodology to look at the influence of bank rescues after the 2007 financial crisis. The results I obtain are consistent for the same kinds of bank rescues and can be explained by simple means. Pessimistic endogenous behaviour causes people to react inertly to exogenous stimuli. A sufficiently negative stimulus though, might amplify the investors’ pessimistic trading style. Moreover, I was able to verify the quick death of three antibubbles in just one month after the interventions, an observation among the first of its kind and based on the theoretical foundations given in (Sornette & Zhou, 2005).
Vinzenz Ludwig Phillip Thoma
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