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Earnings and hindsight bias: An experimental study

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  • Chelley-Steeley, Patricia L.
  • Kluger, Brian D.
  • Steeley, James M.

Abstract

We conduct prediction experiments where subjects estimate, and later reconstruct probabilities of upcoming events. Subjects also value state-contingent claims on these events. We find that hindsight bias is greater for events where subjects earned more money.

Suggested Citation

  • Chelley-Steeley, Patricia L. & Kluger, Brian D. & Steeley, James M., 2015. "Earnings and hindsight bias: An experimental study," Economics Letters, Elsevier, vol. 134(C), pages 130-132.
    • Handle: RePEc:eee:ecolet:v:134:y:2015:i:c:p:130-132
    DOI: 10.1016/j.econlet.2015.07.005
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    References listed on IDEAS

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    1. David Hirshleifer, 2001. "Investor Psychology and Asset Pricing," Journal of Finance, American Finance Association, vol. 56(4), pages 1533-1597, August.
    2. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
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    More about this item

    Keywords

    Hindsight bias; Behavioral finance; Experimental finance;
    All these keywords.

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles

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