of forecast bias and (ii) investors' limited capability to adjust to this bias. We assume that the presence of a bias is … skills, all the more so the larger the uncertainty about the forecast bias …

of traditional finance theory. Even after controlling for market segmentation and “investability” of foreign markets … market uncertainty. My empirical hypotheses are based on a psychological theory that relates uncertainty in the markets to … increases in investors' risk aversion which in turn increases investors' proneness to familiarity bias. I hypothesize that …