We model the dynamic survival of earnings fixated investors in a competitive securities market that allows for learning and arbitrage and that is populated by heterogeneous investors. Our model is distinct from those based on aggressive trading by overconfident investors. We prove that in the...

We perform an asset market experiment in order to investigate whether overconfidence induces trading. We investigate three manifestations of overconfidence: calibration-based overconfidence, the better-than-average effect and illusion of control. Novelly, the measure employed for...

This paper shows that a monopolistically competitive equilibrium can evolve without purposive profit maximization. Specifically, this paper formulates a precise evolutionary dynamic model of an industry where there is continuous entry of firms that randomly select their output levels on entry...

This paper develops a model to examine how mutual funds set fees charged to investors within a context of non-competitive market structure. The empirical evidence shows that the performance, age, size and cash ratio of the fund have statistically significant impacts on the mutual fund fees but...

With an aversion to losses, there are some traders in financial markets who are not overly aggressive in bidding too high and some traders who are not overly aggressive in selling at too low of a price. This paper shows in an evolutionary model of natural selection within the context of a...

This paper examines the impact on market efficiency of traders who are behaving conservatively in their trading activities to avoid potential losses. To date, the consensus in the literature has been that the presence of well informed traders is necessary for achieving market efficiency. In...

This paper develops a simple signaling model whereby high valuation firm uses levels of investment, debt and dividends to convey information to the market regarding its valuation. Conditions are determined under which investment, debt and dividends are employed in a separating Nash equilibrium....

Even when participants know very little about their environment, the market, itself, by serving as a selection process of information, promotes an efficient aggregate outcome. To emphasize the role of the market and the importance of natural selection, rather than the strategic actions of...

Natural selection is used to examine a one-sided buyer auction market. With each trader's behavior preprogrammed with its own inherent and fixed probabilities of overpredicting, predicting correctly and underpredicting the fundamental value of the asset, informational efficiency occurs. If each...

Chapter 1 Introduction -- Chapter 2 Conservatism bias and asset price overreaction or underreaction to new information in a competitive securities market -- Chapter 3 Conservatism bias and asset price overreaction or underreaction to new information in the presence of strategic interaction --...