Research in experimental psychology suggests that, in violation of Bayes' rule, most people
tend to “overreact” to unexpected and dramatic news events. This study of market efficiency …

We present a simple overlapping generations model of an asset market in which irrational
noise traders with erroneous stochastic beliefs both affect prices and earn higher expected …

We test and confirm the hypothesis that individual investors are net buyers of attention-
grabbing stocks, eg, stocks in the news, stocks experiencing high abnormal trading volume …

We provide evidence that stocks with higher dispersion in analysts' earnings forecasts earn
lower future returns than otherwise similar stocks. This effect is most pronounced in small …

The idea that extreme trading activity contains information about the future evolution of stock
prices is investigated. We find that stocks experiencing unusually high (low) trading volume …

Standard asset pricing models assume that:(i) there is complete agreement among investors
about probability distributions of future payoffs on assets; and (ii) investors choose asset …

This paper develops a capital asset pricing theory in a market where noise traders interact
with information traders. Noise traders are traders who commit cognitive errors while …

Behavioral finance is the study of how psychology affects financial decision making and
financial markets. It is increasingly becoming the common way of understanding investor …

LOAN CONTRACTS WITH PROVISION for collateral are of two general types. In one, the
collateral may be an existing asset of the borrowing firm which is pledged to a lender in the …

Economists commonly suppose that persons have probabilistic expectations for uncertain
events, yet empirical research measuring expectations was long rare. The inhibition against …