The British Bicycle Mania and Short Selling
My former PhD student Will Quinn has a new QUCEH working paper entitled Squeezing the Bears: Cornering Risk and Limits on Arbitrage during the British Bicycle Mania. In this paper, Will argues that the risk of being cornered effectively resulted in constraints on short selling during during the British Bicycle Mania of the mid-1890s. These constraints on short selling made it very difficult for traders to correct overvalued shares in bicycle companies. Will's paper is one of the first to look at constraints on short selling during historical financial bubbles.