Showing 1 - 9 of 9
This paper tests the hypothesis that irrational market misvaluation affects firms' takeover behavior. We employ two contemporaneous proxies for market misvaluation, pre-takeover book/price ratios and pre-takeover ratios of residual income model value to price. Misvaluation of bidders and targets...
Persistent link: https://www.econbiz.de/10005076960
One of the most striking results in experimental economics is the ease with which market bubbles form in a laboratory setting and the difficulty of preventing them. This article re-examines bubble experiments in light of the results of an earlier series of market experiments that examine how...
Persistent link: https://www.econbiz.de/10005125589
Behavioral Finance aims to explain empirical anomalies by introducing investor psychology as a determinant of asset pricing. This study provides strong evidence that anomalous stock price behavior following earnings announcements is due to a representativeness bias. It investigates current and...
Persistent link: https://www.econbiz.de/10005134790
L'objectif de la Finance comportementale est de proposer une alternative théorique à la Théorie des Marchés Efficients, en introduisant des hypothèses moins restrictives quant à la rationalité des individus. La compréhension de la formation des prix sur les marchés financiers lorsqu'une...
Persistent link: https://www.econbiz.de/10005134796
If investors have limited attention, then accounting outcomes that saliently highlight positive aspects of a firm's performance will promote high market valuations. When cumulative accounting value added (net operating income) over time outstrips cumulative cash value added (free cash flow), it...
Persistent link: https://www.econbiz.de/10005134858
Some recent empirical works indicate that investor performance and market patterns are primarily information driven instead of a behavioral phenomenon. However, Grossman and Stiglitz information theory and its variations offer little guidance in identifying informed investors and in...
Persistent link: https://www.econbiz.de/10005134939
In our model, informed players decide whether or not to disclose, and observers allocate attention among disclosed signals, and toward reasoning through the implications of a failure to disclose. In equilibrium disclosure is incomplete, and observers are unrealistically optimistic. Nevertheless,...
Persistent link: https://www.econbiz.de/10005407521
Speculation in asset market is modelled as a stochastic betting game played by finite number of players and repeated infinite times. With stochastic asset return and unkown quality of public signal, a generic adaptive learning rule is proposed and the corresponding evolutionary dynamics is...
Persistent link: https://www.econbiz.de/10005118636
We posit a theory that runs counter to how conventional wisdom thinks about analyst bias, that it is the result of distorted incentives by “upstream” factors like the analysts’ employers. We suggest that analysts are also heavily influenced by the beliefs of investors downstream, the...
Persistent link: https://www.econbiz.de/10005561608