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Segue un elenco degli abstract pił significativi della letteratura scientifica sull'argomento. Buona lettura! -Do markets correct biases in probability judgment .
Evidence from market experiments -The
rationality of prices and volume in experimental markets -Using the
Internet for market research: a study of private trading on the Internet -Animat
market-trading interactions as collective social adaptive behavior -Decision-making
in rapidly changing environments: Trading in the spot currency markets -Professional
traders as intuitive Bayesians -An
analysis of the profiles, motivations, and modes of habitual commodity
speculators -Advances
in behavioral finance -Personality
and precognition of stock market speculators -Learning
pattern recognition techniques applied to stock market forecasting -An
unconscious attitude toward the stock market -Psyche,
sex and stocks: The psychodynamic key to beating the market -A method
for measuring decision assumptions -Probabilistic
forecasting: An experiment related to the stock market -Personality
correlates of stock market speculation -Variance
preferences and variance shifts in group investment decisions -Multidimensionality
of locus of control for common stock investors -An
investigation into cognitive styles and patterns of behavior within an
investment framework -Effects of
trend and of profit or loss on the tendency to sell stock -Toward a
cognitive model of investor reaction to news in the stock market -How not to make money in the stock
market -Risky
decision making and choice speed: Implications for market efficiency -An
alternative proxy for expectations: Some experimental evidence -The
psychology of the stock market: An undergraduate course -Goals,
strategy development, and task performance: Some limits on the efficacy of
goal setting -The
October crash: Insights from history, the laboratory and psychology -The gender
gap on Wall Street: An empirical analysis of confidence in investment
decision making -Analyst
judgment: The efficient market hypothesis versus a psychological theory of
human judgment -Explaining
the price^volume relationship: The difference between price changes and
changing prices -Advances in behavioral finance -The
winner's curse: Paradoxes and
anomalies of economic life -Can
ignorance beat the stock market? -Simple heuristics that make us smart -Microworlds
for experimental research: Having your (control and collections) cake, and
realism too -The
symbolic management of stockholders: Corporate governance reforms and
shareholder reactions -Evaluating
individual differences in response to time-pressure situations -Test of
market efficiencies using experimental electronic markets -Rumor and
prediction: Making sense (but losing dollars) in the stock market -The role
of overly optimistic self-perceptions in escalation behaviour -Representativeness
in the market for bets on National Football League games -Biases in
investor decision making: The case of John DeLorean -The
impact of investor interaction and influence on financial market behavior
AN: 1990 TI: Do markets correct biases in probability judgment .
Evidence
from market experiments . AU:
Camerer,-Colin-F AF: U Pennsylvania, Wharton
School, Dept of Decision Sciences, Philadelphia, PA, US BK: Green, Leonard (Ed);
Kagel, John H. (Ed). (1990). Advances in behavioral economics, Vol. 2.
(pp. 126-172). Stamford, CT, US: Ablex Publishing Corp. xiv, 325 pp.SEE
BOOK LA: English AB: (from the chapter)
two studies are reported which test whether simple biases in the
probability judgment of individuals affect their aggregate behavior in
markets MJ: *Consumer-Behavior; *Economy- MN: Judgment- CC: 3920-Consumer-Attitudes-and-Behavior;
3920; 39 PO: Human SF: References AT: Psychology:-Professional-and-Research
AN: 1993 TI: The adaptive decision maker . AU: Payne,-John-W; Bettman,-James-R; Johnson,-Eric-J AF: Duke U, Fuqua School of
Business, Durham, NC, US PB: New York, NY, US:
Cambridge University Press. (1993). xiii, 330 pp. LA: English AB: (from the book) "The Adaptive Decision Maker" provides a new framework for answering [questions about how people make decisions]. The authors propose that people have a repertoire of strategies for making judgments and choices and that the use of these strategies is contingent upon a variety of task, context, and individual difference factors. The authors' framework for explaining these contingencies focuses on the accuracy and cognitive effort characterizing the available strategies. In particular, they provide new methodological approaches and extensive empirical evidence for their hypothesis that individuals select the particular strategy that represents the best accuracy-effort tradeoff for the task at hand. This research shows that individuals are often impressively adaptive in their responses to different decision situations. /// Their framework should be of interest to psychologists, other academics studying decision making, policy and decision analysts, economists, managers, and policy makers. KP: examines a framework for adaptive decision making that proposes that individuals select from a repertoire of decision strategies based on the best accuracy-cognitive effort tradeoff MJ: *Costs-and-Cost-Analysis;
*Decision-Making; *Strategies- MN: Adaptability-Personality CC: 2340-Cognitive-Processes;
2340; 23 PO: Human SF: References AT: Psychology:-Professional-and-Research TC: (Abbreviated) Preface Adaptive
decision behavior: An introduction Contingencies
in decision making
Decision strategies
Decision problem characteristics: Task effects
Decision problem characteristics: Context effects Deciding
how to decide: An effort-accuracy framework
Costs and benefits in decision making
Cognitive effort and decision strategies
Trading accuracy for effort savings Studying
contingent decisions: An integrated methodology
Production systems as models of decision strategies Constructive
processes in decision making When
may adaptivity fail? Improving
decisions and other practical matters The
adaptive decision maker: A look backward and a look forward Appendix:
The Mouselab system References Name
index Subject
index
AN: 1992 DT:
Journal-Article TI: The rationality of prices and volume in experimental markets AU:
Camerer,-Colin-F AF: U Chicago, Graduate
School of Business, IL, US SO: Organizational-Behavior-and-Human-Decision-Processes.
1992 Mar; Vol 51(2): 237-272 JN: Organizational-Behavior-and-Human-Decision-Processes SI: Special Issue: Decision
processes in negotiation PB: US: Academic Press Inc. PY: 1992 URLP: www.academicpress.com XURL: URL; URL-PUBLISHER (URLP) LA: English AB: A review of studies indicates that errors of judgment, of the kind investigated by psychologists studying individuals, persist in prices and measures of trading volume. For example, C. F. Camerer's (1987) study of markets for assets of uncertain value indicates that a theory based on "representativeness" judgments predicts prices better than a theory based on Bayesian rules. Irrationality, in the 2 forms of instinctive preference for goods in one's endowment and the tendency to overestimate one's performance in trading, is also observed in market experiments (e.g., D. Kahneman et al, in press). Forecasts Ss make about future prices in markets experiments are typically not rational either, because they are biased and adaptive. KP: rationality of judgment in prices and volume in experimental markets, implications for negotiation MJ: *Consumer-Behavior; *Economics-;
*Judgment- MN: Negotiation- CC: 3920-Consumer-Attitudes-and-Behavior;
3920; 39 PO: Human
AN: 2000 DT:
Journal-Article TI: Using the Internet for market research: A study of private trading on the Internet. AU: Kent,-Ray; Lee,-Matthew AF: U Stirling, Dept of
Marketing, Stirling, Namibia SO: Journal-of-the-Market-Research-Society.
1999 Oct; Vol 41(4): 377-385 JN: Journal-of-the-Market-Research-Society SI: Special Issue: Research
on the Internet PB: England: Market Research
Society/NTC Publications Ltd. PY: 1999 URLP: www.marketresearch.org.uk XURL: URL; URL-PUBLISHER (URLP) LA: English AB: Reviews the methodological difficulties involved in conducting market research over the Internet. Also presented are results of a study of private trading over the Internet and analyses of how private traders view risks involved with trading, establish motives behind private trading activity, and identify potential solutions to security issues. 8,300 e-mail invitations to participate in a survey were sent out through a multimedia corporation. 240 surveys were completed and returned of which 94 were from traders and 146 were from non-traders. The response rate achieved, while small, seems to be typical of surveys over the Internet so far. Of those who responded to the traders' questionnaire, most had traded more than once and over a third had traded more than 10 times. The main motivation for trading on the web were convenience, value, product availability, and speed. The most common method used to improve security was to check up on the proposed trading partner's history or asking for references from other people with whom they have already traded. Even a topic such as one involving a population of e-mail users, which should be ideal for research using the Internet, presents difficulties of sampling and self-selection that, are hard to overcome.KP: methodological difficulties in conducting Internet market research and motives and security and risks in Internet private trading, Internet users. MJ: *Business-; *Computer-Applications;
*Marketing-; *Methodology-; *Surveys- MN: Motivation-;
Risk-Management; Safety- CC: 3940-Marketing-and-Advertising;
3940; 39 AG: Adulthood PO: Human PT: Empirical-Study SF: References
AN: 2000 MT:
Print-Paper DT:
Journal-Article TI: Animat market-trading interactions as collective social adaptive behavior. AU:
Cliff,-Dave; Bruten,-Janet AF: Massachusetts Inst of
Technology, Artificial Intelligence Lab, Cambridge, MA, US SO: Adaptive-Behavior. 1999
Win; Vol 7(3-4): 384-414 JN: Adaptive-Behavior PB: US: International
Society for Adaptive Behavior. IS: 1059-7123 PY: 1999 URLP: www.adaptive-behavior.org XURL: URL; URL-PUBLISHER (URLP) LA: English AB: Argues that human
economic interactions, particularly bargaining and trading in market
environments, can be considered as collective social adaptive behaviors.The tools and techniques of adaptive behavior research
could be profitably employed to build predictive models of existing or
planned market systems. KP: artificial autonomous agents in bargaining and trading in market environments as collective social adaptive behaviors MJ: *Adaptation-; *Bargaining-;
*Collective-Behavior; *Computer-Simulation CC: 4120-Artificial-Intelligence-and-Expert-Systems;
4120; 41 SF: References
AN: 1998 MT: Print-Paper DT: Dissertation-Abstract TI: Essays on investor behavior AU:
Odean,-Terrance-Thomas AF: U California, Berkeley,
US SO: Dissertation-Abstracts-International-Section-A:-Humanities-and-Social-Sciences.
1998 Feb; Vol 58(8-A): 3196 JN: Dissertation-Abstracts-International-Section-A:-Humanities-and-Social-Sciences PY:
1998 UM:
AAM9803316 LA:
English AB: This dissertation consists of three essays on investor behavior. The first essay examines financial markets in which price-taking traders, a strategic-trading insider, and risk-averse market-makers are overconfident. It also analyzes the effects of overconfidence when information is costly. The effects of overconfidence depend on who in a market is overconfident and on how information is distributed. Overconfidence increases expected trading volume and market depth while lowering the expected utilities of the overconfident. Its effect on volatility and price quality depend on who is overconfident. Overconfident traders can cause markets to underreact to the information of rational traders. Markets also underreact to abstract, statistical, or highly relevant information, while they overreact to salient, anecdotal, or less relevant information The second chapter tests the disposition effect, the tendency of investors to hold losing investments too long and sell winning investments too soon, by analysing trading records for 10,000 accounts at a large discount brokerage house.to lower after-tax returns. Tax-mo These investors demonstrate a strong preference for realizing winners rather than losers. Their behavior does not appear to be motivated by a desire to rebalance portfolios, or to avoid the higher trading costs of low price stocks. Nor is it justified by subsequent portfolio performance. For taxable investments it is non-optimal and leads tivated selling is most evident in December.The third essay shows that investors at a discount brokerage trade excessively. By analysing the same trading records as in essay two, I test whether the stocks these investors purchase outperform those they sell by enough to cover the costs of trading. I find the surprising result that, on average, the stocks they purchase actually underperform those they sell. This is the case even when trading is not apparently motivated by liquidity demands, tax-loss selling, portfolio rebalancing, or a move to lower-risk securities. I examine return patterns before and after transactions. Return patterns before purchases and sales can be explained by the difficulty of the search for stocks to buy, investors' tendency to let their attention be directed by outside sources, the disposition effect, and investors' reluctance to sell short. KP: trading behavior,
investors MJ: *Behavior-;
*Performance-; *Risk-Taking MN: Self-Confidence CC: 2100-General-Psychology;
2100; 21 AG: Adulthood PO: Human PT: Empirical-Study
AN: 1996 DT: Dissertation-Abstract TI: Decision-making in rapidly changing environments: Trading in the spot currency markets. AU:
Smith,-Kip-Christian-Skinner AF: U Minnesota, US SO: Dissertation-Abstracts-International-Section-A:-Humanities-and-Social-Sciences.
1996 Sep; Vol 57(3-A): 1214 JN: Dissertation-Abstracts-International-Section-A:-Humanities-and-Social-Sciences IS: 0419-4209 PY: 1996 UM: AAM9621914 LA: English AB: The research presented here develops and tests an information processing model of skilled decision making in environments that present the decision maker with information that can be counted on to change more quickly than the decision maker can respond--change on the order of seconds. When the decision maker uses the information to define risk, the goal of decision making becomes risk management in a rapidly changing environment. The model developed here describes risk management in rapidly changing environments as a process control task. The centerpiece of the model is the risk space, a representation of the knowledge decision makers invoke to assess and manage the risk posed by rapid change in the information that defines the risk they manage. The risk space and the application of the process control paradigm to risk management constitute a novel approach to understanding the behavior of skilled decision makers. A pair of experiments with professional spot currency traders as subjects demonstrates the explanatory power of this approach. The first experiment informs specification of a model of spot currency trading. A computer simulation of the trading model emulates both profitable and unprofitable trading by professional traders in the first experiment. The second experiment confirms predictions made by the simulation and supports the trading model. The exposition concludes with the argument that the risk space and the model offer an appropriate and effective explanation of skilled risk management across a wide spectrum of professional environments characterized by rapid change. KP: development of model
describing risk management and decision-making in rapidly changing
environments, professional spot currency traders MJ: *Decision-Making; *Models-;
*Professional-Personnel; *Risk-Management CC: 2500-Physiological-Psychology-and-Neuroscience;
2500; 25 AG: Adulthood PO: Human PT: Empirical-Study
AN: 1996 DT:
Journal-Article TI: Professional traders as intuitive Bayesians AU: Anderson,-Matthew-J; Sunder,-Shyam AF: Michigan State U, Eli
Broad Graduate School of Management, Accounting Dept, East Lansing, US SO: Organizational-Behavior-and-Human-Decision-Processes.
1995 Nov; Vol 64(2): 185-202 JN: Organizational-Behavior-and-Human-Decision-Processes PB: US: Academic Press Inc. PY: 1995 URLP: www.academicpress.com XURL: URL; URL-PUBLISHER (URLP) LA: English AB: Compares the behavior of laboratory markets populated by experienced commodity and stock traders with the behavior of markets populated by MBA student traders, using S experience as a treatment variable. Market prices and allocations are assessed relative to the predictions of Bayes' rule and a heuristic model of representativeness. Results show trading experience to be an important determinant of how well market outcomes approximate equilibrium predictions.Markets with student traders exhibit biases consistent with the prior literature; bias levels in markets with experienced traders are substantially reduced and trend toward zero. For the student markets, the representativeness model dominates in predicting market prices. However, for experienced traders, the Bayesian model is a better predictor of prices. These market level results are confirmed with individual level tests. KP: trader experience, bias
in laboratory market outcomes, professional commodity vs MBA student
traders, application of Bayesian vs representativeness probability models MJ: *Business-; *Experience-Level;
*Statistical-Probability MN: Business-Students;
Professional-Personnel CC: 2340-Cognitive-Processes;
2340; 23 AG: Adulthood PO: Human PT: Empirical-Study AN: 1995 DT: Dissertation-Abstract TI: An analysis of the profiles, motivations, and modes of habitual commodity speculators. AU: Canoles,-William-Bruce AF: U Illinois at
Urbana-Champaign, US SO: Dissertation-Abstracts-International-Section-A:-Humanities-and-Social-Sciences.
1995 Mar; Vol 55(9-A): 2925 JN: Dissertation-Abstracts-International-Section-A:-Humanities-and-Social-Sciences IS:
0419-4209 PY:
1995 UM:
AAM9503153 LA:
English AB: The focus of this study was to learn more about a critical commodity market participant, the long term speculator. The speculator's activity broadens a market, creates essential liquidity, and performs an irreplaceable pricing function. Working knowledge of the profiles, motivations, and modes of habitual speculators is essential to both market theorist and policy makers. Responses to a 73 question survey were collected directly from retail commodity brokers with offices in Alabama. Each questionnaire recorded information on an individual commodity client who had traded for an extended period of time. The research determined that the typical trader studied was a married, white male, age 52. He is exceptionally affluent and well educated. He is a self-employed business owner who has shown the ability to recover from financial setbacks. He is a political right wing conservative who is highly involved in the political process. He assumes a good deal of risk in most phases of his life. He is both an aggressive investor and an active gambler. This trader does not consider preservation of his commodity capital to be a very high trading priority. As a result, he rarely uses 'stop loss' orders. He has a career 'winning percentage' of over 51% but is a net loser in dollar terms. In spite of recurring trading losses, he has never made any substantial change in his basic trading style. To this trader, whether he won or lost on a particular trade is more important than the size of the win or loss. Thus he consistently cuts his profits short while letting his losses run. He also anguishes more about missing a move in the market by being on the sidelines than about losing money due to a 'miss call' of the market; i.e., being in the action is more important than the financial consequences. Participating brokers confirmed that for the majority of the speculators studied, the primary motivation for continuous trading is the recreational utility derived largely from having a market KP: profiles and motivations
and modes, habitual commodity speculators MJ: *Biographical-Data; *Business-and-Industrial-Personnel;
*Demographic-Characteristics; *Motivation- CC:
2100-General-Psychology; 2100; 21 AG: Adulthood PO: Human LO: US PT: Empirical-Study
AN: 1993 DT: Edited-Book; Book TI: Advances in behavioral finance AU: Thaler,-Richard-H (Ed) AF: Cornell U, Johnson
Graduate School of Management, Henrietta Johnson Louis Professor of
Economics, Ithaca, NY, US PB: New York, NY, US:
Russell Sage Foundation. (1993). xxi, 597 pp. IB: 0871548453 (hardcover);
0871548445 (paperback) PY: 1993 LA: English AB: (from the introduction)
What is behavioral finance? . . . The common thread in these papers is the
combination of a concern with real world problems and a willingness to
consider all explanations in the search for understanding. KP: behavioral finance and
explanations of market phenomena MJ: *Economics-; *Money- CC: 2900-Social-Processes-and-Social-Issues;
2900; 29 PO: Human SF: References AT: Psychology:-Professional-and-Research TC:
Introduction
Part I: Noise
Noise
/ Fischer Black Noise
trader risk in financial markets / J. Bradford De Long, Andrei
Shleifer, Lawrence H. Summers and Robert J. Waldmann Investor
sentiment and the closed-end fund puzzle / Charles M. C.
Lee, Andrei Shleifer and Richard H. Thaler Part II:
Volatility Do
stock prices move too much to be justified by subsequent changes
in dividends? / Robert J. Shiller What
moves stock prices? / David M. Cutler, James M. Poterba and
Lawrence H. Summers Does
the stock market rationally reflect fundamental values? / Lawrence
H. Summers SEE CHAPTER Stock prices and social dynamics / Robert J. Shiller Stock
return variances: The arrival of information and the reaction
of traders / Kenneth R. French and Richard Roll Part III:
Overreaction Does
the stock market overreact? / Werner F. M. De Bondt and Richard
H. Thaler Measuring
abnormal performance: Do stocks overreact? / Navin Chopra,
Josef Lakonishok and Jay R. Ritter Stock
price reactions to earnings announcements: A summary of recent
anomalous evidence and possible explanations / Victor L. Bernard Overreactions
in the options market / Jeremy Stein Part IV:
International markets Forward
discount bias: Is it an exchange risk premium? / Kenneth
A. Froot and Jeffrey A. Frankel Investor
diversification and international equity markets / Kenneth
R. French and James M. Poterba Part V:
Corporate finance Explaining
investor preference for cash dividends / Hersh M. Shefrin
and Meir Statman Equilibrium
short horizons of investors and firms / Andrei Shleifer
and Robert W. Vishny The
hubris hypothesis of corporate takeovers / Richard Roll The
long-run performance of initial public offerings / Jay R. Ritter Part VI:
Individual behavior Speculative
prices and popular models / Robert J. Shiller The
disposition to sell winners too early and ride losers too long:
Theory and evidence / Hersh M. Shefrin and Meir Statman The
failure of competition in the credit card market / Lawrence
M. Ausubel Index
AN: 1977 DT:
Journal-Article TI: Catastrophe theory AU:
Zeeman,-E-C AF:
U Warwick, England SO: Scientific-American.
1976 Apr; Vol 234(4): 65-83 JN: Scientific-American PB: US: Scientific American,
Inc. PY: 1976 LA: English AB: Catastrophe theory is a mathematical method for dealing with discontinuous and divergent phenomena, and may provide a mathematical language for the hitherto "inexact" sciences. The nature of the models derived from catastrophe theory are illustrated by several diverse examples, including canine and human aggression, self-pity and catharsis, international hostility, stock market behavior, and anorexia nervosa. KP: catastrophe theory,
mathematical method for dealing with discontinuous and divergent
phenomena, applicability to "inexact" sciences MJ: *Mathematical-Modeling;
*Social-Sciences; *Theories- CC: 2240-Statistics-and-Mathematics;
2240; 22 PO: Human
AN: 1977 DT: Dissertation-Abstract TI: Personality and precognition of stock market speculators AU:
Ceren,-Sandra-L AF: United States
International U SO: Dissertation-Abstracts-International.
1975 May; Vol 35(11-B): 5635 JN: Dissertation-Abstracts-International PY: 1975 LA: English KP: personality
chracteristics and precognitive function, successful vs unsuccessful stock
market speculators and non-speculators MJ: *Achievement-;
*Failure-; *Personality-Traits; *Precognition-; *Risk-Taking MN: Consumer-Behavior;
Money- CC: 3120-Personality-Traits-and-Processes;
3120; 31 PO: Human
AN: 1976 DT:
Journal-Article TI: Learning pattern recognition techniques applied to stock market forecasting. AU: Felsen,-Jerry AF: St John's U, NY SO: IEEE-Transactions-on-Systems,-Man,-and-Cybernetics.
1975 Nov; Vol 5(6): 583-594 JN: IEEE-Transactions-on-Systems,-Man,-and-Cybernetics PB: US: Institute of
Electrical and Electronics Engineers Inc. PY: 1975 URLP: www.ieee.org XURL: URL; URL-PUBLISHER
(URLP) LA: English AB: Develops a formal model of a cybernetic investment decision system (CIDS) and uses generalized learning perception-type pattern recognition techniques to outline a conceptual framework for automating or programming such a decision system. Experimental tests of the model showed that decisions made by the CIDS may be superior to results obtainable by the human analyst. (18 ref) KP: learning perception-type
pattern recognition techniques, model of cybernetic investment decision
system MJ: *Cybernetics-;
*Management-Decision-Making CC: 3640-Management-and-Management-Training;
4100-Intelligent-Systems; 3640; 4100; 36; 41 PO: Human SF: References
AN: 1975 MT:
Print-Paper DT:
Journal-Article TI: An unconscious attitude toward the stock market AU:
Miller,-Milton-L AF: U North Carolina-Duke
Psychoanalytic Training Program, Chapel Hill SO:
Psychiatric-Forum. 1975 Win; Vol 5(1): 1-3 JN:
Psychiatric-Forum PB: US: Hall Psychiatric
Institute. PY: 1975 LA: English AB: Describes a male patient's consistent unconscious urge to lose money by stock market manipulation, with the urge becoming more persistent the more the stock market dropped. It is suggested that the loss of money inherited from the patient's father, like the minimizing of assistance received in treatment, unconsciously served to soothe his conscience so that he could more freely express hostility toward his deceased father and other inheritors and toward current father-figures. In reaction to this unconscious urge to appease his conscience by losing money, the patient's penny-pinching attitude caused him to focus on trivia. KP: unconscious urge to lose
money in stock market, male patient MJ: *Intrinsic-Motivation;
*Mental-Disorders; *Patients-; *Unconscious-Personality-Factor CC: 3200-Psychological-and-Physical-Disorders;
3200; 32 PO: Human
AN: 1974 DT: Book TI: Psyche, sex and stocks:
The psychodynamic key to beating the market. AU: Block,-Stanley-H; Correnti,-Samuel AF: U. California, Medical
Center PB: Brightwaters, N.Y,
Windsor. (1973). 247 pp. PY: 1973 LA: English AB: Discusses the psychological factors affecting stock market investors, and contends that changes in attitude and behavior can release hidden forces and increase market effectiveness. The use of 3 specific psychological tools is suggested: conscious resolve, "de-identification," and conflict disclosure. Case histories are included which illustrate the application of these theories and principles. KP: conscious resolve and
"de-identification" and conflict disclosure, release of hidden
forces and market effectiveness increase, stock market investors, book MJ: *Economy-;
*Personality-Processes; *Self-Disclosure CC: 2900-Social-Processes-and-Social-Issues;
2900; 29 PO: Human
AN: 1973 DT: Book TI: A method for measuring
decision assumptions. AU:
Wilcox,-Jarrod-W AF: Massachusetts Inst. of
Technology, Sloan School of Management PB: Cambridge, MA, US: The
MIT Press. (1972). ix, 252 pp. PY: 1972 LA: English AB: Analyzes subjective choice-making and describes a technique for measurement of assumptions. A case study of stock market investors is presented as an illustration. Potential applications to managerial planning, social science research, and other areas are discussed. (6 p. ref.) KP: assumptions measurement,
subjective choice-making, stock market investors, book MJ: *Choice-Behavior;
*Decision-Making; *Measurement- CC: 3600-Industrial-and-Organizational-Psychology;
3600; 36 PO: Human SF: References
AN: 1973 DT:
Journal-Article TI: Probabilistic forecasting: An experiment related to the stock market AU:
Stael-von-Holstein,-Carl-A AF: Stanford Research Inst.,
Decision Analysis Group, Calif SO: Organizational-Behavior-and-Human-Decision-Processes.
1972 Aug; Vol. 8(1): 139-158 JN: Organizational-Behavior-and-Human-Decision-Processes PB: US: Academic Press Inc. PY: 1972 URLP: www.academicpress.com XURL: URL; URL-PUBLISHER
(URLP) LA: English AB: Attempted to (a) tie an experiment to a "practical" situation involving the development of buying prices on the stock exchange, and (b) study assessments of nondichotomous distributions in contrast to most other probability assessment experiments. Ss were 10 bankers, 10 stock market experts, 11 statisticians, 13 business teachers, and 28 business students. Results confirm that people can quantify their beliefs reasonably well in probabilistic terms. However, Ss often failed to make better forecasts than would mechanical schemes based on past frequencies. Results improved considerably when the distributions assessed by a set of Ss were aggregated into a consensus. KP: feedback, prediction of
stock prices, bankers and stock market experts and statisticians and
business teachers and students MJ: *Business-and-Industrial-Personnel;
*Educational-Personnel; *Feedback-; *Hypothesis-Testing; *Mathematicians- MN: Statistical-Probability CC: 3600-Industrial-and-Organizational-Psychology;
3600; 36 PO: Human
AN: 1971 DT: Dissertation-Abstract TI: Personality correlates of stock market speculation AU:
Baker,-William-G AF: U. Oklahoma SO: Dissertation-Abstracts-International.
1971 Jan; Vol. 31(7-B): 4376 JN: Dissertation-Abstracts-International PY: 1971 LA: English KP: personality correlates
of stock market speculation, simulated investment situation, student
investors MJ: *Business-; *Money-;
*Personality-Correlates; *Risk-Taking; *Simulation- CC: 3100-Personality-Psychology;
3100; 31 PO: Human
AN: 1970 DT:
Journal-Article TI: Variance preferences and
variance shifts in group investment decisions. AU: Deets,-M-King; Hoyt,-George-C AF: U. Massachusetts SO: Organizational-Behavior-and-Human-Decision-Processes.
1970; 5(4): 378-386 JN: Organizational-Behavior-and-Human-Decision-Processes PB: US: Academic Press Inc. PY: 1970 URLP: www.academicpress.com XURL: URL; URL-PUBLISHER
(URLP) LA: English AB: 58 finance students made 5 investment decisions as individuals and in groups. Ss believed that they were basing their decisions on actual current stock market data, but in fact they were responding to an investment simulation. The simulation controlled for the probabilities, the pay-offs, and the variances of all choices. It was found that both groups and individuals displayed definite variance preferences, but that groups had substantially greater preference for high variance, high risk securities. It is concluded that variance is an important variable for both individual and group risk-taking and decision-making studies. Results also tend to confirm and extend the generality of earlier studies of group risk taking by introducing a different task, more directly related to typical forms of organizational decision making. (23 ref.) KP: investment decisions,
group vs. individual situations and variance preferences and shifts MJ: *Collective-Behavior;
*Decision-Making; *Preferences-; *Risk-Taking; *Simulation- CC: 2300-Human-Experimental-Psychology;
2300; 23 PO: Human SF: References
AN: 1983 DT:
Journal-Article TI: Multidimensionality of
locus of control for common stock investors. AU: McInish,-Thomas-H; Srivastava,-Rajendra-K AF: U Texas, Arlington SO: Psychological-Reports.
1982 Oct; Vol 51(2): 361-362 JN: Psychological-Reports PB: US: Psychological
Reports. PY: 1982 LA: English AB: Surveyed 253 stock market investors by mail for a study of the multidimensionality of Rotter's Internal-External Locus of Control Scale. Ss comprised a sample 94% male, ranging in age from 21 to over 65 yrs. The mean of the Rotter scores was 6.79. Following principal components analysis with a varimax rotation, extracted factors corresponded closely to those found by previous researchers using data from high school and college students. (7 ref) KP: multidimensionality of
Rotter's Internal External Locus of Control Scale, 21-65 yr old and older
common stock investors MJ: *Business-and-Industrial-Personnel;
*Factor-Analysis; *Rotter-Internal-External-Locus-of-Control-Scale CC: 2223-Personality-Scales-and-Inventories;
3120-Personality-Traits-and-Processes; 2223; 3120; 22; 31 PO: Human SF: References
AN: 1979 DT: Dissertation-Abstract TI: An investigation into cognitive styles and patterns of behavior within an investment framework AU: Ewing-Chow,-Franklin-D AF: U Southern California SO: Dissertation-Abstracts-International.
1978 Apr; Vol 38(10-A): 6192-6193 JN: Dissertation-Abstracts-International PY: 1978 LA: English KP: decision style and
cognitive style, attitudes of trading strategies in investment decision
framework using stock market simulation, students MJ: *Attitudes-;
*Cognitive-Style; *Costs-and-Cost-Analysis; *Decision-Making; *Strategies- MN: Economy- CC: 3600-Industrial-and-Organizational-Psychology;
3600; 36 PO: Human
AN: 1988 DT:
Journal-Article TI: Effects of trend and of profit or loss on the tendency to sell stock AU: Schachter,-Stanley; Ouellette,-Robert; Whittle,-Barry; Gerin,-William AF: Columbia U, New York,
NY, US SO: Basic-and-Applied-Social-Psychology.
1987 Dec; Vol 8(4): 259-271 JN: Basic-and-Applied-Social-Psychology PB: US: Lawrence Erlbaum
Assoc. PY: 1987 URLP: http://www.erlbaum.com XURL: URL; URL-PUBLISHER
(URLP) LA: English AB: Examined the effects of price trend and of profit or loss on the tendency to sell stock by administering questionnaires that simulate a variety of stock market situations to 193 university students. Findings show that the tendency to sell was weakest when recent price trend was up and strongest when trend was down. Holding trend constant, when compared with a no-gain situation, a loss had no impact on selling behavior, whereas a profit markedly increased selling. KP: price trend and profit
or loss, tendency to sell stock, college students MJ: *Consumer-Behavior;
*Costs-and-Cost-Analysis; *Economics- CC: 3920-Consumer-Attitudes-and-Behavior;
3920; 39 AG: Adulthood PO: Human PT: Empirical-Study
AN: 1987 DT: Dissertation-Abstract TI: Toward a cognitive model of investor reaction to news in the stock market AU:
Wolff,-Alan-S AF: Northwestern U SO: Dissertation-Abstracts-International.
1986 Dec; Vol 47(6-B): 2656 JN: Dissertation-Abstracts-International PY: 1986 LA: English KP: stock market news,
cognitive model or investor reaction, implications for financial theory MJ: *Cognitive-Processes;
*Consumer-Attitudes; *Decision-Making; *Economics- CC: 2900-Social-Processes-and-Social-Issues;
2900; 29 AG: Adulthood PO: Human PT: Empirical-Study
AN: 1986 DT:
Journal-Article TI: How not to make money in
the stock market. AU:
Shefrin,-Hersh-M;
Statman,-Meir AF: U Santa Clara, Leavey
School of Business Administration SO: Psychology-Today. 1986
Feb; Vol 20(2): 52-57 JN: Psychology-Today PB: US: American
Psychological Association. PY: 1986 LA: English AB: Offers insight into investment behavior by identifying some psychological phenomena that drive it. The seductive fallacy of technical analysis is discussed, emphasizing the failure of investors to recognize that stock price movements are essentially random. Research indicates that people commit important systematic errors when they make decisions involving risk and chance, and possible explanations for what prevents people from learning the difference between superior skills and luck are discussed. How the concepts of regret, pride, and self-control affect investors is addressed. KP: investment behavior and
analysis of stock price movements and risks MJ: *Costs-and-Cost-Analysis;
*Economics-; *Risk-Taking CC: 3120-Personality-Traits-and-Processes;
3120; 31 PO: Human
AN: 1985 DT: Dissertation-Abstract TI: Risky decision making and choice speed: Implications for market efficiency AU:
Rennert,-Michael-P AF:
Columbia U SO: Dissertation-Abstracts-International.
1984 Sep; Vol 45(3-B): 1063 JN: Dissertation-Abstracts-International PY: 1984 LA: English KP: overall reinforcement
history in previous sequences, behavioral dependence and decision making
speed in 2-choice gambling paradigm, implications for stock market
efficiency MJ: *Choice-Behavior;
*Decision-Making; *Gambling-; *Risk-Taking CC: 3040-Social-Perception-and-Cognition;
3040; 30 PO: Human
AN: 1991 DT: Authored-Book; Book TI: Quasi rational economics AU: Thaler,-Richard-H AF: Cornell U, Johnson
Graduate School of Management, Henrietta Louis Johnson Professor of
Economics, Ithaca, NY, US PB: New York, NY, US:
Russell Sage Foundation. (1991). xxii, 367 pp. PY: 1991 LA: English AB: (from the jacket) Thaler and his colleages challenge established economic theories in such areas as consumer choice and financial markets, offering empirical evidence and alternate models based on behavioral research about how economic decisions are actually made. /// "Quasi Rational Economics" deals with a number of intriguing questions. Why do people have trouble ignoring sunk costs and recognizing opportunity costs? How do people's preferences for already endowed possessions suppress trading volume and keep markets from clearing? What are the effects on market behavior of consumer attitudes about fairness? How do people's mental accounting procedures lead them to behave in economically inconsistent ways? Why do investors' tendencies to overreact to past trends cause losing firms to outperform winners in the stock market? /// In offering answers to these questions, "Quasi Rational Economics" provides an essential introduction to a new field. It mounts a trenchant critique of current practice in economics and calls for a richer, more realistic approach to formulating and testing economic theory. More than just a call for reform, this book provides numerous illustrations of how the call can be answered. KP: critiques economic
theory built on the assumption that human beings act rationally and in
their own self interest and examines how economic decisions are made MJ: *Decision-Making;
*Economics- CC: 2900-Social-Processes-and-Social-Issues;
2900; 29 PO: Human SF: References AT: Psychology:-Professional-and-Research TC: Introduction Part one:
Mental accounting and consumer choice Toward
a positive theory of consumer choice Mental
accounting and consumer choice Gambling
with the house money and trying to break even: The
effects of prior outcomes on risky choice / with Eric J.
Johnson Part two:
Self-control and intertemporal choice An
economic theory of self-control / with Hersh M. Shefrin The
behavioral life-cycle hypothesis / with Hersh M. Shefrin Some
empirical evidence on dynamic inconsistency Part
three: Experimental economics The
psychology of choice and the assumptions of economics Experimental
tests of the endowment effect and Coase theorem /
with Daniel Kahneman and Jack L. Knetsch The
psychology and economics conference handbook Part
four: Fairness Fairness
as a constraint on profit-seeking: Entitlements in the
market / with Daniel Kahneman and Jack L. Knetsch Fairness
and the assumptions of economics / with Daniel
Kahneman and Jack L. Knetsch Part
five: Financial markets The
relevance of quasi rationality in competitive markets /
with Thomas Russell Does
the stock market overreact? / with Werner F. M. De Bondt Further
evidence on investor overreaction and stock market
seasonality / with Werner F. M. De Bondt Do
security analysts overreact? / with Werner F. M. De Bondt Investor sentiment and the closed-end fund puzzle / with
Charles M. C. Lee and Andrei Shleifer Index
AN: 1991 MT:
Print-Paper DT:
Journal-Article TI: An alternative proxy for expectations: Some experimental evidence AU: Singh,-Harinder AF: San Diego State U, CA,
US SO: Journal-of-Economic-Psychology.
1991 Mar; Vol 12(1): 185-196 JN: Journal-of-Economic-Psychology PB: Netherlands: Elsevier
Science Publishers BV. PY: 1991 LA: English AB: Suggests an alternative to traditional econometric forecasts or subjective estimates employed as proxies for the expectations process. The alternative proxy involves modeled subjective estimates, which may combine the advantages of (1) the stability and reliability of a model and (2) being close to the psychological process of decision making. The statistical condition when modeled subjective estimates outperform subjective estimates was tested in an experimental setting. 24 graduate and 29 undergraduate business students made predictions about the stock market price of a company and continued to make predictions after receiving information on previous predictions. In a majority of cases, modeled subjective estimates marginally outperformed subjective estimates. KP: mathematical model of
expectations process and econometric predictions, college students MJ: *Economics-;
*Expectations-; *Mathematical-Modeling; *Prediction- MN: Cognitive-Processes CC: 2900-Social-Processes-and-Social-Issues;
2900; 29 AG: Adulthood PO: Human PT: Empirical-Study
AN: 1991 DT:
Journal-Article TI: The psychology of the stock market: An undergraduate course AU: Lovinger,-Edward AF: U Nevada, Las Vegas, US SO: Teaching-of-Psychology.
1990 Oct; Vol 17(3): 199-201 JN: Teaching-of-Psychology PB: US: Lawrence Erlbaum
Associates. PY: 1990 URLP: http://www.erlbaum.com XURL: URL; URL-PUBLISHER
(URLP) LA: English AB: Describes a course on the psychology of the stock market. Objectives of the course are to acquaint students with how psychological factors affect investors and to provide students with an opportunity to evaluate their own reactions to investing and speculating. Course topics include investment basics, empirical research, and theory. KP: course on psychology of
stock market, college students MJ:
*Curriculum-; *Economics-; *Psychology- CC: 3530-Curriculum-and-Programs-and-Teaching-Methods;
3530; 35 PO: Human
AN: 1991 DT:
Journal-Article TI: The preservation of self in everyday life: The effects of performance expectations and feedback context on feedback inquiry AU: Northcraft,-Gregory-B; Ashford,-Susan-J AF: U Arizona, Tucson, US SO: Organizational-Behavior-and-Human-Decision-Processes.
1990 Oct; Vol 47(1): 42-64 JN: Organizational-Behavior-and-Human-Decision-Processes PB: US: Academic Press Inc. PY: 1990 URLP: www.academicpress.com XURL: URL; URL-PUBLISHER
(URLP) LA: English AB: Examined the roles of performance expectations, feedback context, and self-esteem in feedback inquiry. 78 undergraduates participated in a stock market simulation. Performance expectations and the public context in which Ss sought feedback significantly influenced the frequency of feedback inquiry. However, these effects depended on type of feedback (personal performance vs social comparison) being requested and were influenced by self-esteem of the feedback seeker. KP: performance expectations
and social comparison and self esteem, feedback inquiry during stock
market simulation task, college students MJ: *Expectations-;
*Feedback-; *Self-Esteem; *Social-Comparison CC: 3040-Social-Perception-and-Cognition;
3040; 30 AG: Adulthood PO: Human PT: Empirical-Study
AN: 1989 DT:
Journal-Article TI: Goals, strategy development, and task performance: Some limits on the efficacy of goal setting AU: Earley,-P-Christopher; Connolly,-Terry; Ekegren,-Goeran AF: U Arizona, Coll of
Business and Public Administration, Tucson, US SO: Journal-of-Applied-Psychology.
1989 Feb; Vol 74(1): 24-33 JN: Journal-of-Applied-Psychology PB: US: American
Psychological Assn. PY: 1989 URLP: http://www.apa.org LA: English AB: Specific, difficult goals enhance performance in many tasks. We hypothesize, however, that this effect disappears or reverses for novel tasks that allow multiple alternative strategies. We report findings from three laboratory experiments using a stock market prediction task with these characteristics. In the first study, 34 students made predictions concerning the value of 100 companies' stock based on three manipulated cues after receiving either a "do your best" or a specific, difficult goal concerning the accuracy of their predictions. In the second study, 88 students making stock market predictions received one of the following goals: do your best, specific-easy, specific-moderate, specific-hard, or a tapering, specific goal. The third study (n = 30) replicated the first study by using a different prediction algorithm for the stock market simulation. Repeated measures multivariate analyses of variance conducted on indexes of prediction accuracy and predictor weightings supported the hypothesis that specific, difficult goals (prediction accuracy) increase an individual's strategy search activity and reduce prediction accuracy for the stock predictions. KP: stock market prediction
as novel task with multiple alternative strategies, performance enhancing
effects of specific difficult goals, college students MJ: *Goals-; *Prediction-;
*Strategies-; *Task-Complexity CC: 2340-Cognitive-Processes; 2340; 23 AG: Adulthood PO: Human PT: Empirical-Study
AN: 1990 DT:
Journal-Article TI: Investmentgeschaeft als Objekt pathologischen Spielens. / Investment as a form of compulsive gambling AU:
Mueller,-Norbert;
Laakmann,-Gregor AF:
Psychiatrische Universitaetsklinik Muenchen, Germany SO:
Nervenarzt. 1988 Jun; Vol 59(6): 356-359 JN:
Nervenarzt PB:
Germany: Springer-Verlag. PY: 1988 LA: German AB: Presents a case study of a successful male physician whose stock-market speculations followed the behavior patterns typically associated with compulsive gambling. The patient's investment history (capped by a heavy loss), personal and family history, personality characteristics, and symptomatology are discussed in relation to other cases of compulsive gambling. KP: stock market investment
as compulsive gambling, male physician MJ: *Pathological-Gambling MN: Physicians- CC: 3230-Behavior-Disorders-and-Antisocial-Behavior;
3230; 32 AG: Adulthood PO: Human PT: Empirical-Study AN: 1989 DT:
Journal-Article TI: The October crash: Insights from history, the laboratory and psychology AU: McInish,-Thomas-H AF: U Texas, Arlington, US SO:
Psycholoog. 1988 May; Vol 23(5): 234-238 JN:
Psycholoog SI: Special Issue:
Psychology and economics PB: Netherlands: Van Gorcum
and Comp. b.v. PY: 1988 LA: English AB: Discusses the nature of the October 1987 world stock market crash, describes several historical crashes, and reviews 2 laboratory studies of economic problems. The research discussed relates to (1) the relationship between investors' locus of control and the risk level of common stocks (T. H. McInish; see record 1983-04535-001); (2) McInish's (1987) study on whether scores on the Change scale of the Adjective Check List are related to ownership of varied assets; and (3) the psychological characteristics of risk-takers in financial markets. KP: historical view of
October stock market crash and behavior of stimulated markets and
psychological characteristics of investor risk taking MJ: *Economics-;
*Risk-Taking MN: History- CC: 2900-Social-Processes-and-Social-Issues;
2900; 29 PO: Human
AN: 1989 DT:
Journal-Article TI: The gender gap on Wall Street: An empirical analysis of confidence in investment decision making AU: Estes,-Ralph; Hosseini,-Jinoos AF: Wichita State U, School
of Accountancy, KS, US SO: Journal-of-Psychology.
1988 Nov; Vol 122(6): 577-590 JN: Journal-of-Psychology PB: US: Heldref
Publications. PY: 1988 URLP: http://www.heldref.org LA: English AB: Investigated the personal characteristics that influence confidence in an investment decision in a survey of 1,359 shareholders, securities analysts, institutional investors, and general businesspersons nationwide. Multiple regression was used to control statistically for variation among Ss and to develop a model of investment decision confidence. Women had significantly lower confidence in an investment task than men, after controlling for all other relevant variables and characteristics, including the amount of the investment decision itself. Familiarity with and present attitude about investing in the stock market, college credit hours in accounting and finance, experience in evaluating common stocks, the current level of the stock market, and the investment decision itself (the amount to be invested) were also found to be significant. KP: age and sex and job
experience and education, level of confidence in investment decision
making, shareholders and investors and security analysts and college
business students MJ: *Decision-Making;
*Human-Sex-Differences; *Money-; *Self-Esteem MN: Business-and-Industrial-Personnel;
Job-Experience-Level CC: 3650-Personnel-Attitudes-and-Job-Satisfaction;
3650; 36 AG: Adulthood PO: Human PT: Empirical-Study
AN:
1989 DT:
Journal-Article TI: Analyst judgment: The efficient market hypothesis versus a psychological theory of human judgment AU:
Hunter,-John-E;
Coggin,-T-Daniel AF: Michigan State U, East
Lansing, US SO: Organizational-Behavior-and-Human-Decision-Processes.
1988 Dec; Vol 42(3): 284-302 JN: Organizational-Behavior-and-Human-Decision-Processes PB: US: Academic Press Inc. PY: 1988 URLP: www.academicpress.com LA: English AB: Examined the psychological processes used by financial analysts in making earnings forecasts by comparing 2 models: (1) the efficient market hypothesis, an economic model that asserts that the stock market virtually instantaneously and perfectly assimilates all available investment information and (2) personal construct theory, a psychological model of human judgment that emphasizes the fact that human decision making is based on formal and informal models of the phenomenon under consideration. Path models derived from personal construct theory fit data for 1963 gathered by J. G. Cragg and B. G. Malkiel (1982) and data for 1979-1983 gathered for this study. The efficient market hypothesis was not supported in any test on either data set. KP: efficient market
hypothesis vs personal construct theory of judgment, earning forecasts,
financial analysts MJ: *Cognitive-Processes;
*Economics-; *Judgment-; *Prediction- MN: Personality-Theory;
Theoretical-Orientation; White-Collar-Workers CC: 2340-Cognitive-Processes;
3630-Personnel-Evaluation-and-Job-Performance; 2340; 3630; 23; 36 AG: Adulthood PO: Human PT: Empirical-Study
AN: 1988 DT:
Journal-Article TI: Explaining the price^volume relationship: The difference between price changes and changing prices AU: Andreassen,-Paul-B AF: Harvard U, Cambridge,
MA, US SO: Organizational-Behavior-and-Human-Decision-Processes.
1988 Jun; Vol 41(3): 371-389 JN: Organizational-Behavior-and-Human-Decision-Processes PB: US: Academic Press Inc. PY: 1988 URLP: www.academicpress.com LA: English AB: 54 university students participated in an experimental test in stock market trading. Results reveal strong support for the hypothesis that large price changes cause heavy trading. Trading patterns, profit data, and memory measures revealed that the vast majority of the Ss employed a tracking strategy (i.e., they bought when the price fell and sold when it rose). To test whether the use of this strategy was due to a selective application of the representativeness heuristic on the price stimuli, a 2nd experiment was conducted in which 32 university students were presented either with only price information or with only price change information. Results support the representativeness hypothesis, with Ss in the price change condition tracking poorly and earning less profit. The results are discussed with regard to their implications for the stock market and the psychology of prediction. KP: prices, buying and
selling in simulated stock exchange, college students MJ: *Consumer-Behavior;
*Costs-and-Cost-Analysis CC: 3920-Consumer-Attitudes-and-Behavior;
3920; 39 AG: Adulthood PO: Human PT: Empirical-Study
AN: 1995 DT: Dissertation-Abstract TI: Piggybacked syllogisms for investor behavior: Probabilistic Mental Modeling in rumor-based stock market trading AU: Difonzo,-Nicholas AF: Temple U, US SO: Dissertation-Abstracts-International:-Section-B:-The-Sciences-and-Engineering.
1995 Jun; Vol 55(12-B): 5600 JN: Dissertation-Abstracts-International:-Section-B:-The-Sciences-and-Engineering PY:
1995 UM:
AAM9512815 LA:
English AB: Judgment processes inherent in evaluating rumor are investigated. Empirical research related to belief in rumor is reviewed; four working hypotheses emerged from that review. Belief is directly associated with the rumor's consistency with a hearer's attitudes, its source credibility, and repeated presentation, and inversely associated with refutation. A model of rumor evaluation is proposed by incorporating these factors into Gigerenzer, Hoffrage, and Kleinbolting's (1991) theory of Probabilistic Mental Modeling (PMM), which posits that confidence judgments derive from an inferential reasoning process. Applying the model to stock-market rumors, a prototypical PMM incorporating successive probabilistic syllogisms is proposed. One syllogism allows an indirect inference of the probability that the rumored event is true. The succeeding syllogism involves the attribution of cause to price changes and yields a determination of whether the information will affect future prices. To test the model, a market simulation experiment and a field study were conducted. Samples consisted of 153 undergraduates and 10 investment brokers, respectively. During the simulation, security-relevant rumors were presented to subjects on simulated trading days. The experiment manipulated the percentage of rumors that were in agreement with the price changes occurring on the day each rumor was presented. Confidence judgments covaried with rumor-agreement percentage in pre-test conditions only. Trading behavior was consistent with patterns predicted by the model. High and low agreement conditions favored attribution of price changes to stable underlying causes, spawned anti-regressive price predictions (i.e., away from the mean of past prices), and drew subjects away from strong (and profitable) 'buy-low-sell-high' trading patterns (cf. Andreassen, 1991). Field interviews conducted with brokers were also consistent with the model. Brokers used PMMs in assessing rumor likelihood. Brokers who be KP: Probabilistic Mental
Modeling of judgment processes related to stockmarket rumors, college
students and investment brokers MJ: *Gossip-; *Judgment-;
*Models-; *Probability-Judgment CC: 3000-Social-Psychology;
3600-Industrial-and-Organizational-Psychology; 3000; 3600; 30; 36 AG: Adulthood;
Young-Adulthood PO: Human PT: Empirical-Study
AN: 1994 DT:
Journal-Article TI: When words speak louder than actions: Another's evaluations can appear more diagnostic than their decisions AU: Gonzalez,-Richard AF: U Washington, Dept of
Psychology, Seattle, US SO: Organizational-Behavior-and-Human-Decision-Processes.
1994 May; Vol 58(2): 214-245 JN: Organizational-Behavior-and-Human-Decision-Processes PB: US: Academic Press Inc. PY: 1994 URLP: www.academicpress.com LA: English AB: Five studies, involving a total of 378 Ss, examined when people attend to the diagnosticity of another's behavior. The redundancy hypothesis, which states that people do not believe that others have different information, was tested by presenting Ss the decisions of a previous participant and manipulating the overlap between the S's information and the previous S's information. A simulated stock market was developed to test this claim. Ss made portfolio reallocations on the basis of reports they read. Ss in the experimental conditions also saw the responses of another person who based their responses either on the same information as the S or on different but equally predictive information. Ss became more sensitive to the diagnosticity of another's responses when observing how the person evaluated their information rather than how the person acted on their information. A salience hypothesis is proposed to account for the pattern of results. KP: inference based on
evaluation vs behavior of others, decision making, adults, test of
redundancy hypothesis MJ: *Decision-Making;
*Inference-; *Social-Perception CC: 2340-Cognitive-Processes; 2340; 23 AG: Adulthood PO: Human PT: Empirical-Study AN: 1994 DT:
Journal-Article TI: Roles sexuels et croyances vis-a-vis de l'investissement boursier. / Sex roles and beliefs about stock market investment AU:
Lafrenaye,-Yves;
Carriere,-Denise AF:
U Quebec a Montreal, Canada SO:
Science-et-Comportement. 1993; Vol 23(1): 31-46 JN:
Science-et-Comportement PB: Canada: Assn. Scientifique pour la Modification du Comportement. PY: 1993 LA: French AB: Studied gender differences in new investors' beliefs concerning the consequences of stock market investment. Human subjects: 82 normal male Canadian adults (mean age 36 yrs) (primarily new investors). 120 normal female Canadian adults (mean age 38 yrs) (primarily new investors). Ss completed a questionnaire assessing their behavioral and normative beliefs concerning involvement in the stock market. Gender differences were analyzed. KP: beliefs about stock
market investment, male vs female investors MJ: *Adult-Attitudes;
*Economy-; *Human-Sex-Differences CC: 2900-Social-Processes-and-Social-Issues;
2900; 29 AG: Adulthood PO: Human PT: Empirical-Study
AN: 1993 DT: Edited-Book; Book TI: Advances in behavioral finance AU: Thaler,-Richard-H (Ed) AF: Cornell U, Johnson
Graduate School of Management, Henrietta Johnson Louis Professor of
Economics, Ithaca, NY, US PB: New York, NY, US:
Russell Sage Foundation. (1993). xxi, 597 pp. PY: 1993 LA: English AB: (from the introduction)
What is behavioral finance? . . . The common thread in these papers is the
combination of a concern with real world problems and a willingness to
consider all explanations in the search for understanding. KP: behavioral finance and
explanations of market phenomena MJ: *Economics-; *Money- CC: 2900-Social-Processes-and-Social-Issues;
2900; 29 PO: Human SF: References AT: Psychology:-Professional-and-Research TC:
Introduction
Part I: Noise
Noise
/ Fischer Black Noise
trader risk in financial markets / J. Bradford De Long, Andrei
Shleifer, Lawrence H. Summers and Robert J. Waldmann Investor
sentiment and the closed-end fund puzzle / Charles M. C.
Lee, Andrei Shleifer and Richard H. Thaler Part II:
Volatility Do
stock prices move too much to be justified by subsequent changes
in dividends? / Robert J. Shiller What
moves stock prices? / David M. Cutler, James M. Poterba and
Lawrence H. Summers Does
the stock market rationally reflect fundamental values? / Lawrence
H. Summers SEE CHAPTER Stock prices and social dynamics / Robert J. Shiller Stock
return variances: The arrival of information and the reaction
of traders / Kenneth R. French and Richard Roll Part III:
Overreaction Does
the stock market overreact? / Werner F. M. De Bondt and Richard
H. Thaler Measuring
abnormal performance: Do stocks overreact? / Navin Chopra,
Josef Lakonishok and Jay R. Ritter Stock
price reactions to earnings announcements: A summary of recent
anomalous evidence and possible explanations / Victor L. Bernard Overreactions
in the options market / Jeremy Stein Part IV: International markets Forward
discount bias: Is it an exchange risk premium? / Kenneth
A. Froot and Jeffrey A. Frankel Investor
diversification and international equity markets / Kenneth
R. French and James M. Poterba Part V:
Corporate finance Explaining
investor preference for cash dividends / Hersh M. Shefrin
and Meir Statman Equilibrium
short horizons of investors and firms / Andrei Shleifer
and Robert W. Vishny The
hubris hypothesis of corporate takeovers / Richard Roll The
long-run performance of initial public offerings / Jay R. Ritter Part VI:
Individual behavior Speculative
prices and popular models / Robert J. Shiller The
disposition to sell winners too early and ride losers too long:
Theory and evidence / Hersh M. Shefrin and Meir Statman The
failure of competition in the credit card market / Lawrence
M. Ausubel Index
AN: 1991 DT: Authored-Book; Book TI: The winner's curse: Paradoxes and anomalies of economic life AU: Thaler,-Richard-H AF: Cornell U, Johnson
Graduate School of Management, Henrietta Louis Johnson Professor of
Economics, Ithaca, NY, US PB: New York, NY, US: The
Free Press. (1992). ix, 230 pp. PY: 1992 LA: English AB: (from the publicity materials) According to most economists, economic behavior is a rational undertaking. It is assumed that we know what we want, strive to get it, and accept the verdict of the market for our effort. /// In this profound and provocative work, Richard Thaler challenges the received economic wisdom by revealing many of the paradoxes that abound even in the most painstakingly conducted transactions. He presents literate, challenging, and often funny examples of the various anomalies that confront and confound people in everyday economic life--such as "the winner's curse," a dynamic wherein winners become losers by miscalculating the value of a purchase made in a common value auction. He also demonstrates that markets do not always operate with the traplike efficiency we impute to them. /// Thaler argues that recognizing these sometimes topsy-turvy facts of economic behavior will compel economists, as well as those who live by their lights in our jobs and organizations, to adopt a more balanced view of human nature, one reflected in Adam Smith's professed belief that despite our selfishness, there is something within our natures that prompts us to enjoy, even promote, the happiness of others. KP: reveals the paradoxes
and anomalies of economic behavior MJ: *Behavior-; *Economics- CC: 2900-Social-Processes-and-Social-Issues;
2900; 29 PO: Human PT: Reprint SF: References AT: Psychology:-Professional-and-Research NT: The material in this
book was previously published in the "Journal of Economic
Perspectives." TC: Acknowledgments Introduction Cooperation
/ with Robyn M. Dawes The
ultimatum game Interindustry
wage differentials The
winner's curse The
endowment effect, loss aversion, and status quo bias / with
Daniel Kahneman and Jack L. Knetsch Preference
reversals / with Amos Tversky Intertemporal
choice / with George Loewenstein Savings,
fungibility, and mental accounts Pari-mutuel
betting markets / with William T. Ziemba Calendar
effects in the stock market A
mean reverting walk down Wall Street / with Werner F. M. De
Bondt Closed-end
mutual funds / with Charles M. C. Lee an Andrei
Shleifer Foreign
exchange / with Ken A. Froot Epilogue References Index
AN: 2000 DT:
Journal-Article TI: The impact of the order book privilege on traders' behavior and the market process: An experimental study AU:
Gerke,-Wolfgang;
Arneth,-Stefan; Syha,-Christine AF:
U Erlangen-Nuernberg, Nuernberg, Germany SO: Journal-of-Economic-Psychology.
2000 Apr; Vol 21(2): 167-189 JN: Journal-of-Economic-Psychology PB: Netherlands: Elsevier
Science Publishers BV. PY: 2000 LA:
English AB: Examined an order book insider's influence on traders' behavior in an experimental stock market with heterogeneous information. Ss had the chance to trade either in a market with a monopolistic order book insider or in a market in which nobody has access to the order book. Statistical tests were run to identify effects of the order book privilege on individual behavior and on the market process. The results indicate that with the same number of orders placed in both markets more transactions occur in the privilege-stock. The order book insider seems to have a coordinating function that helps to aggregate diverse information whereas no significant differences concerning volatility and liquidity occur between the 2 markets. Only some of the order book insiders are able to outperform the market because of their privilege. KP: order book insider
influence, stock market trader behavior and market process MJ: *Interpersonal-Influences CC: 3020-Group-and-Interpersonal-Processes;
3020; 30 AG: Adulthood PO: Human PT: Empirical-Study SF: References
AN: 1999 DT:
Chapter TI: Can ignorance beat the stock market? AU:
Borges,-Bernhard;
Goldstein,-Daniel-G; Ortmann,-Andreas; Gigerenzer,-Gerd AF: Coopers and Lybrand,
Westport, CT, US BK:
Gigerenzer, Gerd; Todd, Peter M.. The
ABC Research Group. (1999). Simple heuristics that make us smart.
Evolution and cognition. (pp. 59-72). New York, NY, US: Oxford University
Press. xv, 416 pp.SEE BOOK PY: 1999 LA: English AB: (from the chapter) Proposes a fast and frugal heuristic that exploits a lack of knowledge, rather than market-specific information or tools, to construct stock portfolios. The authors tested whether an ignorance-based decision-making mechanism (recognition heuristic) could make money in the stock market. 480 Ss were grouped into 1 of 4 categories: American laypeople, American experts, German laypeople, and German experts. Ss completed a company recognition task. The authors constructed 2 investment portfolios consisting of highly recognized companies and then analyzed their performance for 6 mo. Results show that the recognition knowledge of laypeople turned out to be more profitable than the considered opinions of mutual fund experts. Findings indicate that in investments, there may be wisdom in ignorance. KP: recognition heuristic,
money making in stock market, laypeople vs experts, Germany and US MJ: *Decision-Making;
*Economics-; *Heuristic-Modeling; *Recognition-Learning CC: 2340-Cognitive-Processes; 2340; 23 AG: Adulthood PO: Human LO: Germany; US PT: Empirical-Study SF: References AT: Psychology:-Professional-and-Research
AN: 1999 DT: Edited-Book; Book TI: Simple heuristics that make us smart AU:
Gigerenzer,-Gerd;
Todd,-Peter-M AF: Max Planck Inst for
Human Development, Ctr for Adaptive Behavior and Cognition, Berlin,
Germany CA: The ABC Research Group,
Berlin, Germany PB: New York, NY, US: Oxford
University Press. (1999). xv, 416 pp. SE: Evolution and cognition. PY: 1999 LA: English AB: (from the jacket) Explores how heuristics can enable both living organisms and artificial systems to make smart choices, classifications, and predictions by employing bounded rationality. The authors address how fast and frugal heuristics can produce adaptive decisions in situations as varied as choosing a mate, dividing resources among offspring, predicting high school drop out rates, and playing the stock market. Computational models of heuristics are discussed, incorporating an interdisciplinary approach to decision making. KP: heuristics and decision
making and bounded rationality, living organisms and artificial systems MJ: *Artificial-Intelligence;
*Decision-Making; *Heuristic-Modeling; *Logical-Thinking CC: 2340-Cognitive-Processes;
4120-Artificial-Intelligence-and-Expert-Systems; 2340; 4120; 23; 41 PO: Human SF: Index; References AT: Psychology:-Professional-and-Research TC: The ABC
research group Part I:
The research agenda SEE CHAPTER Fast and frugal heuristics: The adaptive toolbox
/ Gerd
Gigerenzer and Peter M. Todd
Part II: Ignorance-based decision making SEE CHAPTER The recognition heuristic: How ignorance makes
us smart /
Daniel G. Goldstein and Gerd Gigerenzer SEE CHAPTER Can ignorance beat the stock market? / Bernhard
Borges,
Daniel G. Goldstein, Andreas Ortmann and Gerd Gigerenzer
Part III: One-reason decision making SEE CHAPTER Betting on one good reason: The take the best
heuristic /
Gerd Gigerenzer and Daniel G. Goldstein SEE CHAPTER How good are simple heuristics? / Jean
Czerlinski,
Gerd Gigerenzer, and Daniel G. Goldstein SEE CHAPTER Why does one-reason decision making work? A case study
in ecological rationality / Laura Martignon and Ulrich Hoffrage SEE CHAPTER When do people use simple heuristics, and how can
we tell? / Joerg Rieskamp and Ulrich Hoffrage SEE CHAPTER Bayesian benchmarks for fast and frugal heuristics
/ Laura Martignon and Kathryn Blackmond Laskey Part IV:
Beyond choice: Memory, estimation, and categorization SEE CHAPTER Hindsight bias: A price worth paying for fast and
frugal memory / Ulrich Hoffrage and Ralph Hertwig SEE CHAPTER Quick estimation: Letting the environment do the work
/ Ralph Hertwig, Ulrich Hoffrage and Laura Martignon SEE CHAPTER Categorization by Elimination: Using few cues to choose
/ Patricia M. Berretty, Peter M. Todd and Laura Martignon Part V:
Social intelligence SEE CHAPTER How motion reveals intention: Categorizing social
interactions / Philip W. Blythe, Peter M. Todd and Geoffrey
F. Miller SEE CHAPTER From pride and prejudice to persuasion: Satisficing
in mate search / Peter M. Todd and Geoffrey Miller SEE CHAPTER Parental investment by simple decision rules / Jennifer
Nerissa Davis and Peter M. Todd Part VI:
A look around, a look back, a look ahead SEE CHAPTER Demons versus heuristics in artificial intelligence,
behavioral ecology, and economics / Adam S. Goodie,
Andreas Ortmann, Jennifer Nerissa Davis, Seth Bullock and Gregory M. Werner What
we have learned (so far) / Peter M. Todd and Gerd
Gigerenzer
References
Name index
Subject index
AN: 1998 DT:
Journal-Article TI: Microworlds for experimental research: Having your (control and collections) cake, and realism too AU: DiFonzo,-Nicholas; Hantula,-Donald-A; Bordia,-Prashant AF: Rochester Inst of
Technology, Dept of Psychology, Rochester, NY, US SO: Behavior-Research-Methods,-Instruments-and-Computers.
1998 May; Vol 30(2): 278-286 JN: Behavior-Research-Methods,-Instruments-and-Computers PB: US: Psychonomic Society
Inc. PY: 1998 LA: English AB: Microworlds (MWs) are dynamic computer-generated environments that Ss interact with in the laboratory and that simulate conditions encountered in the field. Precise levels of experimental control and improved accuracy and efficiency of data collection procedures are characteristic of MWs. It is proposed that these benefits are achieved with concomitant gains in internal validity (afforded by high levels of experimental realism) and external validity (afforded by the replication of the temporal-interactive nature of most field phenomena). To illustrate these ideas, 3 sets of MW studies are described that investigated rumor and behavior in the stock market (BROKER), escalation behavior (INVE$TMENT CHOICE$), and the application of foraging theory to internet shopping (CYBERSHOPPER). KP: computer-generated
environments for experimental control and efficiency of data collection MJ: *Computer-Simulation;
*Data-Collection; *Experimentation- CC: 2260-Research-Methods-and-Experimental-Design;
2260; 22 PO: Human PT: Conference-Proceedings-Symposia SF: References CF: Society for Computers in
Psychology., 27th, Nov 1997, Philadelphia, PA, US; A brief version of this
paper was presented as part of the symposium, Simulation and Virtual
Reality, at the aforementioned conference.
AN: 1998 DT:
Journal-Article TI: The symbolic management of stockholders: Corporate governance reforms and shareholder reactions AU:
Westphal,-James-D;
Zajac,-Edward-J AF: U Texas, Coll of
Business Administration, Austin, TX, US SO: Administrative-Science-Quarterly.
1998 Mar; Vol 43(1): 127-153 JN: Administrative-Science-Quarterly PB: US: Administrative
Science Quarterly. PY: 1998 LA: English AB: Examines the consequences of symbolic action in corporate governance. Specifically, the authors examine (1) whether the stock market reacts favorably to specific governance mechanisms that convey the alignment of CEO and shareholder interests, such as the adoption of long-term incentive plans (LTIPs), even if such plans are not actually implemented; (2) whether providing agency-related explanations for LTIPs affects the stock market response; and (3) whether the symbolic adoption of LTIPs deters other governance reforms that would reduce CEOs' control over their boards. Analysis of data from over 400 corporations over a 10-yr period suggests that symbolic corporate actions can engender significant positive stockholder reactions and deter other, more substantive governance reforms, thus perpetuating power imbalances in organizations. Implications for institutional and agency-based perspectives on organizations are discussed. KP: consequences of symbolic
management in form of long-term incentive plans in corporate governance,
shareholder reactions, organizations MJ: *Management-Methods;
*Professional-Organizations CC: 3640-Management-and-Management-Training;
3640; 36 SF: References
AN: 1998 DT:
Journal-Article TI: Evaluating individual differences in response to time-pressure situations AU: Joslyn,-Susan; Hunt,-Earl AF: U Washington, Dept of
Psychology, Seattle, WA, US SO: Journal-of-Experimental-Psychology:-Applied.
1998 Mar; Vol 4(1): 16-43 JN: Journal-of-Experimental-Psychology:-Applied PB: US: American
Psychological Assn. PY: 1998 LA:
English AB: The ability to make decisions within a few seconds to a couple of minutes is the hallmark of many applied situations ranging from air traffic control to stock market trading. The 5 studies reported here explore the hypothesis that there are abstract psychological demands common to many rapid decision-making situations. The authors suggest that these characteristics can be used to identify people who are good rapid decision makers. People were trained to operate computer simulations of the job skills involved in air traffic control and 2 aspects of public safety dispatch. Although these tasks are very different on the surface, they all require decision making under time pressure. Performance was successfully predicted from performance on an abstract decision-making task. KP: individual decison
making performance differences in time pressure tasks, adults MJ: *Decision-Making;
*Individual-Differences; *Performance-; *Task-Complexity; *Time- CC: 2340-Cognitive-Processes; 2340; 23 AG: Adulthood PO: Human; Male; Female LO: US PT: Empirical-Study SF: References AN: 1997 DT:
Journal-Article TI: Test of market efficiencies using experimental electronic markets AU:
Tung,-Y-Alex;
Marsden,-James-R AF: U Connecticut, Dept of
Operations and Information Management, Storrs, CT, US SO: Journal-of-Business-Research.
1998 Feb; Vol 41(2): 145-151 JN: Journal-of-Business-Research PB: US: Elsevier Science
Publishing Co Inc. PY: 1998 LA:
English AB: Investigated the impact of various forms of inside information availability on the profits of traders. Based on the findings regarding insiders' profits, the market efficiency hypotheses (EMH) are examined. The overall EMH is divided into 3 categories: (1) weak form EMH, (2) semi-strong form EMH, and (3) strong form EMH. An electronic market shell was developed which incorporated stock market trading activities and subsequent stock price adjustments based on transactions and random stocks. The shell provided an electronic process for passing messages, collecting information, performing direct calculations, and integrating random components with direct numerical computations to determine market changes in stock price, individual participant profits, and overall market performance. Results show a positive relationship between information quality and trading profits in a market, evidence supporting semi-strong form EMH. This work provides an alternative way of investigating issues concerning market efficiencies rather than using the traditional field study approach. KP: use of experimental
electronic markets for investigation of market efficiency hypothesis,
traders MJ: *Computers-;
*Economics-; *Hypothesis-Testing; *Information-Exchange; *Marketing- MN: Information- CC: 3940-Marketing-and-Advertising;
2229-Consumer-Opinion-and-Attitude-Testing; 3940; 2229; 39; 22 AG: Adulthood SF: References
AN: 1997 DT:
Journal-Article TI: Rumor and prediction: Making sense (but losing dollars) in the stock market AU: DiFonzo,-Nicholas; Bordia,-Prashant AF: Rochester Inst of
Technology, Dept of Psychology, Rochester, NY, US SO: Organizational-Behavior-and-Human-Decision-Processes.
1997 Sep; Vol 71(3): 329-353 JN: Organizational-Behavior-and-Human-Decision-Processes PB: US: Academic Press Inc. PY: 1997 URLP: www.academicpress.com LA: English AB: It is proposed that by making sense of unpredictable price movements, rumors spawn anti-regressive predictions and adversely affect trading decisions despite investor denigration of rumors. Two experimental stock market simulations investigated these ideas. While participating in a computerized investment game, 38 undergraduate Ss (Study 1) were presented with news and 58 undergraduate Ss (Study 2) were presented with published and unpublished rumors. All manipulations caused departures from a profitable buy-lowsell-high (tracking) trading strategy despite strong differences in rated credibility between types of information source. Ss claimed that rumor sources were non-credible and that they were not influenced by rumors in trading decisions; nevertheless they traded on rumors as though they were news. Results integrate rumor theory with the psychology of prediction, extend the corpus of rumor literature to behavior, and highlight the sensemaking function of rumor in situations filled with uncertainty. KP: news vs published vs
unpublished rumors, anti-regressive predictions and investment trading
decisions, undergraduates participating in computerized investment game MJ: *Consumer-Behavior;
*Credibility-; *Economics-; *Gossip-; *News-Media MN: Resource-Allocation CC: 3920-Consumer-Attitudes-and-Behavior;
3920; 39 AG: Adulthood PO: Human; Male; Female LO: US PT: Empirical-Study
AN: 1996 DT: Dissertation-Abstract TI: The role of overly optimistic self-perceptions in escalation behaviour AU: Hook,-Sterling-Paul AF: York U, Canada SO: Dissertation-Abstracts-International-Section-A:-Humanities-and-Social-Sciences.
1996 Jul; Vol 57(1-A): 0308 JN: Dissertation-Abstracts-International-Section-A:-Humanities-and-Social-Sciences PY:
1996 UM:
AAMNN03703 LA: English AB: The study used escalation situations as contexts in which to investigate the role of overly-optimistic self-perceptions in decision-making under conditions of uncertainty. The main argument of the study held that the decision to escalate commitment is a product of illusionary thinking. Two-hundred and eighteen student-subjects were exposed to two decision scenarios and asked to role-play the decision-maker in each. One scenario situated the decision in the stock market, where money had been invested in the shares of a company but the value of the shares had declined. The other scenario described a decision surrounding the development of a new product, where funds had been invested but the project was not completed. Results of the study indicated that escalation decisions are characterized by a strong element of illusionary thinking. Suggestions for incorporating these findings into existing explanations of escalation behaviour were provided. KP: overly optimistic
self-perceptions, decision-making and illusionary thinking under uncertain
conditions, students MJ: *Decision-Making;
*Optimism-; *Self-Perception; *Thinking-; *Uncertainty- MN: Illusions-Perception CC: 3600-Industrial-and-Organizational-Psychology;
3600; 36 AG: Adulthood PO: Human PT: Empirical-Study
AN: 1996 DT:
Journal-Article TI: Representativeness in the market for bets on National Football League games AU:
Tassoni,-Charles-John AF: U Pennsylvania, PA, US SO: Journal-of-Behavioral-Decision-Making.
1996 Jun; Vol 9(2): 115-124 JN: Journal-of-Behavioral-Decision-Making PB: US: John Wiley and Sons
Inc. PY: 1996 URLP: http://www.wiley.com LA: English AB: Suggests that finding representativeness in a real-world economic market would indicate that even decision makers who are highly experienced and motivated use the heuristic, and would, in addition, violate the efficient market hypotheses (i.e., the theory that market prices fully reflect all available information). Testing for representativeness in the market for bets on NFL games avoids complications that make tests of representativeness in a stock market difficult to interpret. Evidence for representativeness in the NFL betting market is found in a data set from an earlier study that failed to test for representativeness, and in the 1976-1979 market. Representativeness does not appear to exist in the contemporary market; however, perhaps because with the advent of the personal computer, the market depends less on purely human judgment. KP: representativeness in
market for bets on National Football League games MJ: *Football-; *Gambling-;
*Heuristic-Modeling MN: Economics- CC: 2340-Cognitive-Processes;
2340; 23 PO: Human PT: Empirical-Study URLP: http://www.heldref.org
AN: 1999 DT:
Journal-Article TI: Biases in investor decision making: The case of John DeLorean AU: Bateman,-Thomas-S; Schwenk,-Charles-R AF: U North Carolina, School
of Business Administratin, Chapel Hill, NC, US SO: Mid-American-Journal-of-Business.
1986 Sep; Vol 1(2): 5-11 JN: Mid-American-Journal-of-Business PB: US: Ball State
University. PY: 1986 LA: English AB: Why do people so often make bad investment decisions when it should have been clear from the beginning the decisions would turn sour? Using the John DeLorean case as an example, this article explores some of the natural human tendencies that adversely affect the quality of decision making. Investors, once they are aware of these biases, can take steps to counteract their influence and make more well-informed decisions. KP: biases in investment
decision making MJ: *Business-;
*Decision-Making; *Organizational-Behavior CC: 3660-Organizational-Behavior;
3660; 36 AG: Adulthood PO: Human
AN: 1996 DT: Dissertation-Abstract TI: The impact of investor interaction and influence on financial market behavior AU: Kwan,-Sylvia-Shiu-Han AF: Stanford U, US SO: Dissertation-Abstracts-International-Section-A:-Humanities-and-Social-Sciences.
1996 Apr; Vol 56(10-A): 4075 JN: Dissertation-Abstracts-International-Section-A:-Humanities-and-Social-Sciences PY:
1996 LA:
English AB: Investing in risky assets is a social process, one driven not only by economic activity but also by the collective thoughts, fears, and opinions of all participants. Expectations regarding the returns to holding such assets are subject to the social pressures that shape any other opinion, be it political, social, or artistic. Much of finance research, however, is limited to studying individuals as independent thinkers, removed from their social and organizational context. Under such a supposition, traditional finance theory has not been able to account for observed market behavior such as crashes, excess volatility, and large deviations between an asset's price and its fundamental value. This dissertation addresses these issues with a market model that relaxes the assumption of investor independence and explicitly accounts for social behavior such as interactions and mutual influences among investors. Sociological theory is combined with current finance theory, yielding a comprehensive model that helps explain erratic market behavior. The model provides a theoretical explanation for how investor interaction and influence foster a herd-like mentality that can push asset prices beyond their fundamental values and increase the probability of extreme market movements. In practice, the model has the potential to predict periods of high and low market volatility. To account for social factors, a birth-death Markov model is developed and analyzed. The model demonstrates that while the absence of influence, as assumed by current theory, results in a random walk distribution of expected returns, increased influence can result in a bi-modal distribution accompanied by high volatility and increased volume. Statistical tests of the model using Dow Jones Industrial Averages index return data and analysts' earnings forecasts show that there exist time periods during which investor influence is prevalent and that the return distributions for these periods are non-normal. Monte C KP: investor interaction and
influence, financial market behavior MJ: *Business-; *Industrial-Psychology; *Social-Influences;
*Social-Interaction CC: 3000-Social-Psychology; 3000; 30 AG: Adulthood PO: Human PT: Empirical-Study
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ABSTRACT