The anatomy of a bubble company: the London Assurance in 1720

Graeme Acheson, Michael Aldous, William Quinn

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)
137 Downloads (Pure)


The London Assurance Company (LA), which incorporated during the bubble of 1720, experienced more dramatic price movements in its shares than the South Sea Company. This paper examines how incorporating during the bubble affected its long run performance. We show that the bubble in the Company’s share price was partly attributable to changes in market structure during the share issuance process. As a result of the bubble, the Company’s original subscribers, who had been curated for expertise and political connections, overwhelmingly exited during 1720 and were replaced by unsuccessful speculators. Analysis of LA shareholder behaviour up to 1737 suggests that this loss of shareholder expertise had detrimental consequences for the Company’s performance. These results demonstrate how a bubble in the shares of a newly created company can lead to an exodus of value-adding investors, damaging the company’s long-term prospects.

Original languageEnglish
Pages (from-to)160-184
Number of pages25
JournalEconomic History Review
Issue number1
Early online date16 May 2023
Publication statusPublished - 16 May 2023


  • Economics and Econometrics
  • History


Dive into the research topics of 'The anatomy of a bubble company: the London Assurance in 1720'. Together they form a unique fingerprint.

Cite this