Investor Psychology and Asset Pricing
Author: Hirshleifer, David1
Source: The Journal of Finance, Volume 56, Number 4, August 2001 , pp. 1533-1597(65)
Publisher: Blackwell Publishing
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Abstract:
The basic paradigm of asset pricing is in vibrant flux. The purely rational approach is being subsumed by a broader approach based upon the psychology of investors. In this approach, security expected returns are determined by both risk and misvaluation. This survey sketches a framework for understanding decision biases, evaluates the a priori arguments and the capital market evidence bearing on the importance of investor psychology for security prices, and reviews recent models.Document Type: Original article
DOI: 10.1111/0022-1082.00379
Affiliations: 1: Fisher College of Business, The Ohio State University
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