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We survey retail investors at an online bank to study beliefs about the autocorrelation of aggregate stock returns, and how these beliefs shape investment decisions measured in administrative account data. Individuals' beliefs exhibit substantial heterogeneity and predict trading responses to...
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We show that a common (identical across investors) irrationality in information processing can be enough to create …), make investment horizon age-independent, and keep all information complete. The common irrationality in our model takes the … form of a somewhat non-Bayesian information processing. The resulting trade between such essentially identical individuals …
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