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Naïve *Buying* Diversification and Narrow Framing by Individual Investors

Gathergood, John - 2019

We provide the first tests to distinguish whether individual investors equally balance their overall portfolios (naïve portfolio diversification--NPD) or engage in naïve buying diversification (NBD)--equally balancing values in same-day purchases of multiple assets. We find NBD in purchases of...

Persistent link: https://www.econbiz.de/10012479521

Differences of Opinion and International Equity Markets

Dumas, Bernard - 2011

about the information content in public signals. We determine how informational advantages by domestic investors in the …

Persistent link: https://www.econbiz.de/10012461904

Putting Per-Capita Income Back into Trade Theory

Markusen, James R. - 2010

A major role for per-capita income in international trade, as opposed to simply country size, was persuasively advanced by Linder (1961). Yet this crucial element of Linder's story was abandon by most later trade economists in favor of the analytically-tractable but counter-empirical assumption...

Persistent link: https://www.econbiz.de/10012462748

Private Information, Human Capital, and Optimal "Home Bias" in Financial Markets

Ehrlich, Isaac - 2010

By allowing for imperfectly informed markets and the role of private information, we offer new insights about observed … models predict. Our model ascribes the "bias" to endogenous information acquisition bolstered by investors' human capital. We … differences across countries in the degree to which home asset prices are "information-revealing", which may be relevant for fully …

Persistent link: https://www.econbiz.de/10012462984

International Portfolio Allocation under Model Uncertainty

Benigno, Pierpaolo - 2009

<i>An older version of this paper is available at http://www.nber.org/papers/w14734.rev0.pdf to NBER subscribers and those in domains eligible for free downloads. Individual purchasers of papers are directed to email orders@nber.org or to call 617 588-1405 to purchase the older version.</i>

Persistent link: https://www.econbiz.de/10012463913

Home Bias at the Fund Level

Hau, Harald - 2008

This paper presents new stylized facts on the distribution of the home bias at the fund level. We find (i) a large heterogeneity in the degree of home bias across mutual funds; (ii) a positive correlation between the size of funds and home bias; and (iii) a positive correlation between the size...

Persistent link: https://www.econbiz.de/10012464475

Goods Trade and International Equity Portfolios

Collard, Fabrice - 2007

We show that international trade in goods is the main determinant of international equity portfolios and offers a compelling -- theoretically and empirically -- resolution of the portfolio home bias puzzle. The model implies that investors can achieve full international risk diversification if...

Persistent link: https://www.econbiz.de/10012465027

The International Diversification Puzzle Is Not As Bad As You Think

Heathcote, Jonathan - 2007

In simple one-good international macro models, the presence of non-diversifiable labor income risk means that country portfoliosshould be heavily biased toward foreign assets. The fact that theopposite pattern of diversification is observed empirically constitutes the international...

Persistent link: https://www.econbiz.de/10012465163

International Portfolios with Supply, Demand and Redistributive Shocks

Coeurdacier, Nicolas - 2007

This paper explains three key stylized facts observed in industrialized countries: 1) portfolio holdings are biased towards local equity; 2) international portfolios are long in foreign currency assets and short in domestic currency; 3) the depreciation of a country's exchange rate is associated...

Persistent link: https://www.econbiz.de/10012465225

Information Immobility and the Home Bias Puzzle

Van Nieuwerburgh, Stijn - 2007

can. But why doesn't global information access eliminate this asymmetry? We model investors, endowed with a small home … information advantage, who choose what information to learn before they invest. Surprisingly, even when home investors can learn … what foreigners know, they choose not to: Investors profit more from knowing information others do not know. Learning …

Persistent link: https://www.econbiz.de/10012465284

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