Motivated by research in psychology and experimental economics, we assume that investors update their beliefs about an asset's value upon observing the price, but only when the price clearly reveals that others obtained private information that differs from their own private information....

Social psychologists have documented the false consensus effect, which refers to the tendency for people to overestimate their similarity to others. I model the false consensus effect by assuming that agents overestimate the correlation of their private signal errors. By modifying a simple...

We conduct a series of forecasting experiments to examine how people update their beliefs upon observing others' forecasts. We show that people insufficiently update their beliefs, and that this tendency is only partially explained by the better than average effect. We document that subjects...

Non-deal roadshows (NDRs) are private meetings between management and institutional investors, typically organized by analysts. We find that around NDRs, local institutional investors trade heavily and profitably, while retail trading is significantly less informative. Analysts who sponsor NDRs...

Motivated by research in psychology and experimental economics, we assume that investors update their beliefs about an asset's value upon observing the price, but only when the price clearly reveals that others obtained private information that differs from their own private information. In...