Jose Scheinkman

Jose Scheinkman is a mathematical economist and professor at Columbia University, having previously been at Princeton. His most influential work (with Wei Xiong) developed a model of "speculative fever" or heterogeneous beliefs in asset markets. The model shows that when investors disagree about the fundamental value of an asset and can short-sell only at a cost, the price can rise above what any individual investor thinks is the fundamental value — because each investor values the option to sell to a more optimistic buyer in the future. This model helps explain asset bubbles, the high trading volume during bubbles, and why overpriced stocks often have high short interest and high turnover. The research has been influential in both academic finance and policy discussions about market stability.