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Ortoleva, Pietro - 2013

This paper studies, theoretically and empirically, the role of overconfidence in political behavior. Our model of overconfidence in beliefs predicts that overconfidence leads to ideological extremeness, increased voter turnout, and increased strength of partisan identification. Moreover, the...

Persistent link: https://www.econbiz.de/10013078592

Overconfident Investors, Predictable Returns, and Excessive Trading

Daniel, Kent - 2016

Individuals and asset managers trade aggressively, resulting in high volume in asset markets, even when such trading results in high risk and low net returns. Asset prices display patterns of predictability that are difficult to reconcile with rational expectations–based theories of price...

Persistent link: https://www.econbiz.de/10012999987

Integrating Personality Psychology into Economics

Heckman, James J. - 2011

Persistent link: https://www.econbiz.de/10013120982

The Importance of Trust for Investment : Evidence from Venture Capital

Bottazzi, Laura - 2014

We examine the effect of trust on financial investment and contracting decisions in a micro-economic environment where trust is exogenous. Using hand-collected data on European venture capital, we show that the Eurobarometer measure of trust among nations significantly affects investment...

Persistent link: https://www.econbiz.de/10013068297

Neglected Risks, Financial Innovation, and Financial Fragility

Gennaioli, Nicola - 2010

We present a standard model of financial innovation, in which intermediaries engineer securities with cash flows that investors seek, but modify two assumptions. First, investors (and possibly intermediaries) neglect certain unlikely risks. Second, investors demand securities with safe cash...

Persistent link: https://www.econbiz.de/10013142292

Neglected Risks : The Psychology of Financial Crises

Gennaioli, Nicola - 2015

We model a financial market in which investor beliefs are shaped by representativeness. Investors overreact to a series of good news, because such a series is representative of a good state. A few bad news do not change investor minds because the good state is still representative, but enough...

Persistent link: https://www.econbiz.de/10013029565

Behavioral Corporate Finance : A Survey

Baker, Malcolm - 2010

preferences and judgmental biases on managerial decisions. This survey reviews the theory, empirical challenges, and current …

Persistent link: https://www.econbiz.de/10012762557

Depression Babies : Do Macroeconomic Experiences Affect Risk-Taking?

Malmendier, Ulrike - 2010

We investigate whether individuals' experiences of macro-economic outcomes have long-term effects on their risk attitudes, as often suggested for the generation that experienced the Great Depression. Using data from the Survey of Consumer Finances from 1964-2004, we find that individuals who...

Persistent link: https://www.econbiz.de/10012757672

Measuring Bubble Expectations and Investor Confidence

Shiller, Robert J. - 2010

explored: bubble expectations and investor confidence. Semiannual time-series indicators of these attitudes are presented for … are presented. Four different time-series indicators of investor confidence, that nothing can go wrong, are produced. Time … negative-bubble expectations index, and an investor confidence index are derived from these indicators. Behavior of the …

Persistent link: https://www.econbiz.de/10012763808

Finance and the Preservation of Wealth

Gennaioli, Nicola - 2013

We introduce the model of asset management developed in Gennaioli, Shleifer, and Vishny (2012) into a Solow-style neoclassical growth model with diminishing returns to capital. Savers rely on trusted intermediaries to manage their wealth (claims on capital stock), who can charge fees above costs...

Persistent link: https://www.econbiz.de/10013080418