We model the dynamic survival of earning fixated traders in a competitive security market populated by heterogeneous investors that allows for learning and arbitrage. We prove that in the absence of noise traders, rational investors will drive out earnings fixated investors from the market in...

1. Evolution, Irrationality and Perfectly Competitive Equilibrium -- 2. Evolution, Irrationality and Monopolistically Competitive Equilibrium -- 3. Evolution and Informationally Efficient Equilibrium in a Commodity Futures Market -- 4. Natural Selection, Random Shocks and Market Efficiency in a...

The literature views aggressive trading behavior as the key for representativeness heuristic traders to survive in competition with rational traders. This paper provides another reason. That is, in this dynamic model of a competitive securities market, representativeness heuristic traders can...