When households make financial decisions, one may expect them to be both informative and rational – just as any other financial agent. In this paper, we question whether this hypothesis is error-free and correct by using a unique large-scale event study. Our results do not support the axioms...

There is mounting evidence that retail investors make predictable, costly investment mistakes, including underinvestment, naïve diversification, and payment of excessive fund fees. Over the past thirty-five years, however, participant-directed 401(k) plans have largely replaced professionally...

The dynamics between coexisting experts and non-experts has important implications for online market and platform design. We study their relationship in the context of crowdfunding. While crowdfunding originated as a non-expert market, experts have become active participants. We investigate the...

We study how sophisticated investors, when faced with shocks to information environment, change their information acquisition and trading behavior, and how these changes in turn affect market efficiency. We find that, after exogenous reductions of analyst coverage due to closures and mergers of...

Despite a vast theoretical literature that builds on costly information acquisition, there is no direct evidence on the importance of information costs in investors’ private information choices. Using a large sample of Chinese mutual fund managers’ visits to firm headquarters and exploiting...

We conduct a choice experiment to investigate the impact of the financial crisis of 2008 on retirement saver investment choice and risk aversion. Analysis of estimated individual risk parameters shows a small increase in mean risk aversion between the relatively tranquil period of early 2007 and...