This paper confronts the main foundations of the neoclassical theory of the capital market and asset pricing with allegations of behavioral finance. Cornerstones of the traditional theory are discussed in the first section. It is followed by a brief presentation of the behavioral approach....

The disposition effect is known as the reluctance of investors to realize losses and their eagerness to realize gains. The aim of the present research was to examine the impact of the disposition effect at the aggregate (market) level. In order to limit the number of factors affecting the...

Until now, IPO market timing has been mostly associated with a varying number of IPOs in certain periods of “hot” and “cold” issue markets. We would like to offer a different perspective. We focus on a speed of the IPO process, after the decision to go public was actually made. Our...

This paper investigates whether managers adapt their dividend policies to the changing preferences of investors, as predicted by the catering theory of dividends. First, we noted a systematic decline in companies that paid out dividends in a sample of 2226 American publicly-traded companies, not...

In this paper we propose a new cross-sectional asset pricing model employing a Young-minus-Old (OMY) factor, which accounts for long-run post-IPO underperformance. The OMY factor might be also seen as a measure of market sentiment. We test the model using stock returns from the Warsaw Stock...

Socially Responsible Investment (SRI) funds have been shown to underperform, primarily due to restricting their investments to a subset of the universe of investable assets. Rapid growth of SRI funds implies that there is a growing segment within the investment community who are willing to...