Question A:
Bans on the short selling of financial securities, such as stocks and government bonds, would lead to prices that are further, on average, from their fundamental values.
Responses
© 2025. Kent A. Clark Center for Global Markets.
9%
2%
0%
2%
12%
60%
14%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
1%
11%
66%
22%
Question B:
Requiring investors to disclose short positions in a stock at the equivalent threshold as they are required to do for long positions would improve the accuracy of stock prices.
Responses
© 2025. Kent A. Clark Center for Global Markets.
9%
5%
0%
2%
42%
42%
0%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
1%
48%
52%
0%
Question A Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
 Daron Acemoglu |
MIT | Bio/Vote History | ||
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Both theoretically and empirically, there are reasons to expect that shortselling can lead to bubbles and other price distortions.
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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 Katherine Baicker |
University of Chicago | Did Not Answer | Bio/Vote History | |
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 Abhijit Banerjee |
MIT | Bio/Vote History | ||
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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in general yes, but there are exception due to short squeezes and predatory short selling
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 Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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 David Cutler |
Harvard | Bio/Vote History | ||
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My guess is there's a literature on this, but I don't know it.
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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Short-sale bans (a) leave optimists less constrained than pessimists and (b) reduce market liquidity. These both cause price distortions.
-see background information here |
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Short selling is one important way to prevent prices from being too out of whack on the high side.
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Amy Finkelstein |
MIT | Bio/Vote History | ||
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 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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 Robert Hall |
Stanford | Bio/Vote History | ||
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This is what the research seems to say.
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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 Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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There is little serious research on this question. Research often ignores differences in beliefs, an obvious source of shorting behavior.
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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 Pete Klenow |
Stanford | Bio/Vote History | ||
 Jonathan Levin |
Stanford | Bio/Vote History | ||
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 Eric Maskin |
Harvard | Bio/Vote History | ||
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 William Nordhaus |
Yale | Bio/Vote History | ||
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 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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Short-selling provided information. The sub-prime crisis might have been less severe it it weas easier to short mortgage-backed securities.
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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Short sellers moderate speculative episodes. Short sellers have occasionally revealed fraud (Enron).
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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 Carl Shapiro |
Berkeley | Bio/Vote History | ||
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Ban on shorts means prices do not reflect the views and information of pessimistic investors. Possible exception is during a short squeeze.
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 James Stock |
Harvard | Bio/Vote History | ||
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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without short selling prices are set by the most optimistic traders yielding a winner's curse.
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 Christopher Udry |
Northwestern | Did Not Answer | Bio/Vote History | |
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Question B Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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Transparency should help, but there are various complications related to herding and complex inferences less sophisticated traders can draw.
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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Katherine Baicker |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Abhijit Banerjee |
MIT | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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outcome depends on details
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Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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Judith Chevalier |
Yale | Bio/Vote History | ||
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David Cutler |
Harvard | Bio/Vote History | ||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Reveals price-relevant information about who is shorting but reduces the incentive to short. The net effect on price accuracy is unclear.
-see background information here -see background information here |
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Shorts may fear companies’ withholding information which discourages shorts. Withholding also lowers the informativeness of prices.
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Amy Finkelstein |
MIT | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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It would make it even easier to squeeze the shorts.
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Robert Hall |
Stanford | Bio/Vote History | ||
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Disclosures cut both ways
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Oliver Hart |
Harvard | Bio/Vote History | ||
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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Having large short positions may lead to market power, justifying this rule.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Would likely lead to less shorting. Squeezes, who knows? Sometimes prominent shorts campaign against their target (eg Einhorn and Lehman).
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Bio/Vote History | ||
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William Nordhaus |
Yale | Bio/Vote History | ||
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Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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One would expect the additional information to be valuable in the market.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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No obvious reason for current asymmetry of treatment between investor accumulating large position and one amassing large short interest.
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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James Stock |
Harvard | Bio/Vote History | ||
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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I don't see offhand why there should be an asymmetry in disclosure rules long v short but whether it affects prices is uncertain.
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Christopher Udry |
Northwestern | Did Not Answer | Bio/Vote History | |
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