The gambler’s fallacy is the incorrect notion that after observing a particular (random) event more frequently than normal, that event is less likely to occur in the future. The main objective of our analysis is to provide tests of the gambler’s fallacy in financial markets by examining...

In this study, we examine how exchange rate volatility in a particular country influences both the kurtosis and skewness of stock returns. In a variety of tests that hold constant the structure of the financial market, we show that exchange rate volatility is associated with greater kurtosis,...

Using a unique empirical approach that accounts for the possibility that financial market crashes are endogenously determined by market structures, this study examines how economic freedom contribute to crashes in financial markets. On one hand, economic freedom might provide an unregulated...

Economic theory suggests that speculative trading can lead to instability in financial markets. Using a novel dataset on retail trading activity in the US, this study extends the literature and investigates the impact of retail (speculative) trading on the volatility of the financial markets...

The gambler’s fallacy is the incorrect notion that after observing a particular (random) event more frequently than normal, that event is less likely to occur in the future. The main objective of our analysis to provide tests of the gambler’s fallacy in financial markets by examining...