Investor psychology: a behavioural explanation of six finance puzzles
AbstractThis paper surveys the behavioural finance explanation of six puzzles of finance. These puzzles are: stock price under- and overreactions, excessive trading and the gender puzzle, financial hypes and panic, the equity premium puzzle, the winner/loser puzzle and the dividend puzzle. After an introduction of prospect theory and a description of heuristics and biases in the judgment of information, the paper applies behavioural insights to explain the puzzles.
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Bibliographic InfoPaper provided by Netherlands Central Bank, Directorate Supervision in its series Research Series Supervision (discontinued) with number 64.
Date of creation: Mar 2004
Date of revision:
psychology; behavioural finance;
Other versions of this item:
- Prast, H.M., 2004. "Investors psychology: A behavioural explanation of six finance puzzles," Open Access publications from Tilburg University urn:nbn:nl:ui:12-4296140, Tilburg University.
- G1 - Financial Economics - - General Financial Markets
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
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