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Essays In Behavioral Finance
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Book Synopsis Essays in Behavioral Finance by : Javier Rodríguez
Download or read book Essays in Behavioral Finance written by Javier Rodríguez and published by . This book was released on 2002 with total page 132 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays in Behavioral Finance and Investments by : Shema Frédéric Mitali
Download or read book Essays in Behavioral Finance and Investments written by Shema Frédéric Mitali and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays in Behavioral Finance by : Xing Huang
Download or read book Essays in Behavioral Finance written by Xing Huang and published by . This book was released on 2013 with total page 236 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation contains three essays in behavioral finance. It explores investors' (non-standard) behaviors and their impacts on market efficiency and market valuations. I strive to empirically characterize how market participants behave, and to identify how these behaviors can improve our understanding of the financial market. The first chapter studies the impact of prior investment experience in an industry on the subsequent purchase of new stocks in the same industry. Using trading records data for households at a large discount broker from 1991 to 1996, I establish that the experience of positive excess returns in a given industry increases the probability of purchasing similar stocks in that industry relative to other industries. This result is robust to industry momentum, wealth effects, and investor heterogeneity. The effect decays when the experience is further in the past. Furthermore, I find that investor sophistication mitigates this experience effect. These results are consistent with mechanisms where investors put more weight on their own experience than on other available historical information when updating the beliefs about an industry's future return. The results are also consistent with investors learning about their stock-picking ability in an industry from their experienced outcomes. In the second chapter, I ask the question: do investors slow to incorporate return-relevant information if it reflects firms' operations abroad? Using the corresponding industry return in the foreign countries, I show that foreign operations information is slowly incorporated into stock prices. A trading strategy exploiting the foreign operations information of multinational firms generates a monthly abnormal return of approximately $0.80$ percentage points, controlling for risk-based factors. The return predictability is not driven by U.S. industry momentum, global industry momentum or foreign country-specific industry momentum. The third chapter further explores the underlying mechanism to explain the market under-reaction to foreign information identified in the second chapter. The return predictability becomes more pronounced for smaller firms and firms with less analyst coverage, lower institutional holdings, lower fraction of foreign operations and more complicated international operations structure. I also find that stock prices respond more to foreign operations information during the month of a quarterly earnings announcement or when there is more foreign news relative to domestic news appearing in the media. In addition, information about firms' operations in Asia is delayed more than information about operations in Europe and English-speaking countries. These results are consistent with the hypothesis that news about multinational firms' foreign operations diffuses gradually, indicating investors' limited attention and processing capacity for foreign information.
Book Synopsis Essays in Behavioral Finance by : Karen Vanessa Selody
Download or read book Essays in Behavioral Finance written by Karen Vanessa Selody and published by . This book was released on 2008 with total page 390 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Financial literacy, motivated reasoning, and gender by : Thérèse Lind
Download or read book Financial literacy, motivated reasoning, and gender written by Thérèse Lind and published by Linköping University Electronic Press. This book was released on 2019-05-16 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: I wrote this thesis to create a better understanding of how individual characteristics influence our feelings, our behavior and our way of interpreting information. My focus is on financial behavior and financial information, however I also consider a political context. I investigate the (usually) enabling abilities of financial literacy and numeracy. I also consider impediments such as stereotype threat and motivated reasoning, which can prevent people from engaging in certain behaviors or from interpreting information objectively. Both processes stem from valued beliefs and psychological foundations, consequently peoples’ efforts, decisions, and evaluations are based on them. The first essay, “Competence, confidence, and gender: The role of perceived and actual financial literacy in household finance,” broadens our understanding of the benefits of financial competence. I contrast perceived and actual levels of financial literacy, and consider the role of numeracy and cognitive reflective ability. I conclude that perceived and actual levels of financial literacy positively affect behavior and wellbeing; however, perceived financial literacy more so than actual financial literacy. No such effect is observed for numeric ability and cognitive reflection. Furthermore, women are more anxious about financial matters even though they tend to engage more frequently in the considered financial behaviors. The second essay, “Threatening finance? Examining the gender gap in financial literacy,” continues my exploration of the relationship between gender and financial literacy. In a series of studies, I investigate whether the observed gender gap in financial literacy can be identified in nonnumerical contexts, if it can be associated with confidence in financial matters, and if it can be attributed to stereotype threat, which posits that inbuilt prejudices about gender and finance undermine women’s performance of tasks that involve finance. The results show that the observed gender gap in financial literacy is robust even in nonnumerical financial contexts and suggest that a stereotype threat for women in the financial domain might be present. The gender gap in financial literacy could not be attributed to a difference in (displayed) confidence. In the third essay, “Preferences for lump-sum over divided payment structures,” I investigate whether or not people display systematic preferences for lump–sum or divided payment structures and how these preferences differ in gain (benefit) and loss (payment) situations. I investigate what happens when payments belong to a single underlying event, such as when people can choose to pay immediately or in installments. I also examine whether or not individual differences in time preferences, risk preferences, numeracy, and financial literacy are associated with preferences for one payment structure or the other. The aggregate results show a tendency for people to prefer obtaining and paying money in lump sums. I find no systematic indication that the considered individual differences play a role in this type of decision. The fourth essay, “Motivated reasoning when assessing the effect of refugee intake,” inquires into differences in worldview ideology, whether people identify as nationally or globally oriented, hinder them from objectively interpreting information. I use an experiment to find out if people display motivated reasoning when interpreting numerical information about the effects of refugees on the crime rate. Our results show evidence of motivated reasoning along the lines of worldview ideology. However, individuals with higher numeric ability were less likely to engage in motivated reasoning, leading to the conclusion that motivated reasoning is more likely to be driven by feelings and emotional cues than by deliberate analytical processes.
Book Synopsis Three Essays in Behavioral Finance by : Michael Young
Download or read book Three Essays in Behavioral Finance written by Michael Young and published by . This book was released on 2018 with total page 328 pages. Available in PDF, EPUB and Kindle. Book excerpt: Over the last two decades, there has been a significant increase in research related to behavioral finance. As Barberis and Thaler (2002) point out, there are two main aspect of behavioral finance: limits to arbitrage and the effects of psychology. My dissertation will focus on the second aspect, the effects of psychology on individual investor behavior. The first essay examines an important question in this behavioral finance literature: changes in aggregate risk aversion. I use changes in the level of terrorism in the United States as a shock to the aggregate mood of American investors, and examine changes in flows to mutual funds as a proxy for investor risk preferences. After examining investors vulnerable to changes in mood after attacks, and ruling out any possible effect due to changes in expect risk, and changes to expected returns, the first essay concludes that mood driven risk aversion is the likely cause of the change in behavior. In the second essay, we use the insights gained from Essay 1 regarding the change in behavior of U.S. investors following an increase in terrorist attacks. Using household level of equity market participation and individual trading data the second essay examines the array of decisions investors make. The second essay finds that households participate less in equity markets, trade less, but purchase more local stocks in response to terrorist attacks. Additionally, this change in behavior is especially apparent in households where the designated head is a male. Finally, in the third essay we turn away from terrorism, and examine the effects that local NFL team performance on equity market participation. Examining the most popular spectator sport in the U.S. the third essay shows that poor performance by local NFL teams correlates with fewer households in that state owning equity. While previous studies argue that sentiment is the driver of sports related behavior, the third essay find that gambling losses may also play a role in the drop in equity market participation following seasons with a low number of wins. Taken together, the dissertation demonstrates the importance of examining external shocks and the effect they have on the behavior of investors. From terrorism to something as seemingly benign as the NFL, the dissertation adds to the behavior finance literature by identifying new shocks that effect the investing behavior of individuals.
Book Synopsis Essays in Behavioral Finance by : Allie Schwartz
Download or read book Essays in Behavioral Finance written by Allie Schwartz and published by . This book was released on 2007 with total page 166 pages. Available in PDF, EPUB and Kindle. Book excerpt: The idea that individuals make mistakes in financial decisions has been explored in recent literature. This dissertation examines these mistakes in two financial contexts: mortgage decisions and equity investment. The first chapter demonstrates that some households, in particular, more educated households and households which remember their mortgage terms tend to refinance more profitably than others. Furthermore, living with neighbors who make sound decisions is correlated with profitable refinancing. In the second chapter, I study the historical demand for adjustable mortgages and find that adjustable mortgage ownership more prevalent in the tails of the education, wealth, and debt distributions. Furthermore, educated, wealthy households show evidence of market timing their decision to switch between adjustable and fixed rate mortgages. The final chapter examines stock investment decisions of individuals versus institutions. By using a new method to infer high frequency institutional ownership, we are able to observe how institutions and individuals trade as a group. We find that institutions trade with short-term losses and longer term gains. We also show that they exploit one type of trading strategy---the post earnings announcement drift.
Book Synopsis Essays in Behavioral Finance by : Alok Kumar
Download or read book Essays in Behavioral Finance written by Alok Kumar and published by . This book was released on 2003 with total page 194 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays on Behavioral Finance by : Michael Schneider
Download or read book Essays on Behavioral Finance written by Michael Schneider and published by . This book was released on 2014 with total page 83 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays in Behavioral Finance written by and published by . This book was released on 2015 with total page 129 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays on Behavioral Finance by : Sujung Choi
Download or read book Essays on Behavioral Finance written by Sujung Choi and published by . This book was released on 2012 with total page 112 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of two essays. In the first essay, "Investor misvaluation, signaling, and takeovers: Evidence from closed-end fund discounts", I investigate investor misvaluation as a motivation for closed-end fund mergers and acquisitions (M & As). Following previous studies, I view the closed-end fund discount as a proxy for investor misvaluation at the individual fund level. When a closed-end fund suffers from investor misvaluation in the stock market, closed-end fund M & As can be served to investors to signal a rosy prospect for the closed-end fund, or a synergy effect. Using comprehensive data of closed-end fund M & As from 1994 through 2009, I find that (1) both acquirer and target funds experience deep fund discounts over pre-announcement periods and (2) acquirer funds are less likely to be undervalued than target funds, and target funds are more deeply undervalued than acquirer funds when M & As occur. After M & A announcements, fund discounts shrink for targets, but go slightly deeper for acquirers. In the long run, fund discounts of the combined funds shrink even for acquirers, and the misvaluation on acquirer and target closed-end funds is corrected. Post-merger objective-adjusted performance initially improves for both acquirer and target funds because of the synergies perceived by investors, but generally worsens on average in the third year following the M & As. In the second essay, "Herding among individual investors in the Korean stock market", I investigate whether herding among local individual investors exists in the Korean stock market. I examine the hypothesis of whether a potential investor's decision, such as picking a particular stock within a given period, correlates with the decisions of neighbors living in the same area. Using a unique dataset on individual online and offline trading obtained from a brokerage firm in Korea, I analyze the buying and selling transactions of 10,000 individual accounts from February 1999 to December 2005. By employing the herding measure proposed by Lakonishok, Shleifer, and Vishny (1992), I report that individual investors herd on a given stock-month and stock-day. Offline investors in the same local area exhibit stronger herding compared to online investors. Using OLS regressions, I find that own-area effects, or correlated trades by individual investors who are geographically close, are stronger compared to other-area effects in both contemporaneous and lagged coefficients. Investors who are male, wealthy, and non-religious tend to invest more in the stock market compared to investors who are female and Protestant.
Book Synopsis Essays in Behavioral Finance and Social Economics by : Samir M. Hammami
Download or read book Essays in Behavioral Finance and Social Economics written by Samir M. Hammami and published by . This book was released on 2006 with total page 308 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays in Behavioral Finance by : Ferdinand Langnickel
Download or read book Essays in Behavioral Finance written by Ferdinand Langnickel and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays in Behavioral Finance by : Justin Birru
Download or read book Essays in Behavioral Finance written by Justin Birru and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays in Behavioral Finance by : Alexander Elmar Cochardt
Download or read book Essays in Behavioral Finance written by Alexander Elmar Cochardt and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays on Behavioral Finance by : Fabian Gamm
Download or read book Essays on Behavioral Finance written by Fabian Gamm and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Behavioural Finance by : James Montier
Download or read book Behavioural Finance written by James Montier and published by John Wiley & Sons. This book was released on 2002-10-11 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: A concrete guide that links the theory of behavioral finance with applications in financial products Behavioral finance is a rapidly expanding field, with major implications for the way in which the investment process is conducted. Behavioural Finance links the concepts of behavioral finance to measurable variables and smarter investment decision making. Comprehensive coverage relating theory to practical investment analysis provides a usable, practical guide for real-world situations.