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Heidhues, Paul; Kőszegi, Botond; Strack, Philipp - 2024

We develop a model in which an overconfident agent learns about groups in society from observations of his and others' successes. In our model, both the agent's information and his beliefs are multi-dimensional, allowing us to study interactions between different views. Overall, society always...

Persistent link: https://www.econbiz.de/10014578270

Can overconfident executives restrain overinvestment?

Liu, Xuanbing - In: Modern economy 8 (2017) 8, pp. 1056-1068

Persistent link: https://www.econbiz.de/10011748422

On the evolutionary stability of the sentiment investor

Antico, Andrea; Bottazzi, Giulio; Giachini, Daniele - 2022

The behavioural finance literature attributes the persistent market misvaluation observed in real data to the presence of deviations from rational thinking of the actors involved. Cognitive biases and the use of simple heuristics can be described using expected utility maximising agents that...

Persistent link: https://www.econbiz.de/10013161531

Decomposing the disposition effect

Maier, Johannes K.; Fischer, Dominik Simon - 2021

We theoretically show that there is a fundamental disconnect between the disposition effect, i.e., investors’ tendency to sell winning assets too early and losing assets too late, and its common empirical measure, namely a positive difference between the proportion of gains and losses...

Persistent link: https://www.econbiz.de/10012628736

Behavioral finance factors and investment decisions : a mediating role of risk perception

Al-Mansour, Bashar Yaser; Elkrghli, Sabri; Almansour, … - In: Cogent economics & finance 11 (2023) 2, pp. 1-20

Modern finance theory assumes that the stock market is efficient, and stock prices reflect all available information …. However, behavioral finance theory argues that stock prices can be influenced by psychological and emotional factors. This … study aims to examine the impact of behavioral finance factors on investment decisions in the Saudi equity markets through …

Persistent link: https://www.econbiz.de/10014503093

Do Investors Buy What They Know? Product Market Choices and Investment Decisions

Keloharju, Matti - 2014

This paper shows individuals' product market choices influence their investment decisions. Using microdata from the …

Persistent link: https://www.econbiz.de/10013069336

The Effects of Investors’ Information Processing Limitations When Incorporating Return on Assets into Their Investment Decisions

Hewitt, Max - 2017

Research suggests that investors fail to fully process changes in return on assets due to their incomplete processing of changes in asset turnover. We propose that investors do not fully process changes in return on assets—stemming from changes in asset turnover—because of their (1) fixation...

Persistent link: https://www.econbiz.de/10012965083

Belief Updating and Investment Decisions : The Impact of Good or Bad News Varies With Prior Returns

Trutmann, Kevin; Heinke, Steve; Rieskamp, Jörg - 2022

favorability of the news, leading to a anomalies in investment decisions. We propose a context-sensitive reinforcement learning …

Persistent link: https://www.econbiz.de/10013491946

Actual and perceived financial sophistication and wealth accumulation : the role of education and gender

Bannier, Christina E.; Neubert, Milena - 2016

This study examines the role of actual and perceived financial sophistication (i.e., financial literacy and confidence … in formal education, whereas confidence increases in education for men but decreases for women, we observe that women …) in education for women (men). Confidence, however, supports only highly-educated men's wealth. When considering different …

Persistent link: https://www.econbiz.de/10011417255

Overconfidence and the political and financial behavior of a representative sample

Bosch-Rosa, Ciril; Kassner, Bernhard; Ahrens, Steffen - 2024

representative sample. Consistent with theoretical predictions, our findings indicate that excessive confidence in one's judgment is …

Persistent link: https://www.econbiz.de/10015075012

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