The Price of Uncertainty: How Bubbles Form in Restricted Markets
![The emergence of bubbles hinges on a delicate balance - a sufficient excess of buoyant force overcoming the resisting forces of surface tension and gravity, a condition meticulously defined by [latex] \Delta P = \sigma \frac{1}{r} + \rho g h [/latex].](https://arxiv.org/html/2512.21115v1/bubble.png)
New research reveals how limitations on short selling, combined with uncertainty about market models, can drive the formation of asset price bubbles.
![The emergence of bubbles hinges on a delicate balance - a sufficient excess of buoyant force overcoming the resisting forces of surface tension and gravity, a condition meticulously defined by [latex] \Delta P = \sigma \frac{1}{r} + \rho g h [/latex].](https://arxiv.org/html/2512.21115v1/bubble.png)
New research reveals how limitations on short selling, combined with uncertainty about market models, can drive the formation of asset price bubbles.

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