In theory, it can lessen volatility since traders can bet against overvalued companies in the same way they can invest in undervalued companies. In practice, I'

In theory, it can lessen volatility since traders can bet against overvalued companies in the same way they can invest in undervalued companies. In practice, I'm not so sure if this is really how short selling works, since "the market can remain irrational longer than you can remain solvent". I do think a world without any short selling would have much more frenzied boom / bust cycles though.