Momentum in Emerging Markets: Investigation of Overconfidence and Cognitive Bias Factors
AbstractThe purpose of this paper is to check if investors in emerging markets, especially in the Tunisian stock market, have the same psychological biases as those documented in developed markets. To achieve this purpose we adopt a survey approach that uses the investigation technique through the development and distribution of a questionnaire describing some scenarios related to behavioral biases - either suggested by theory or extracted from reality- that are suspected to generate the momentum phenomenon. Our major findings are: the Tunisian investor seems to be prudent, non confident, over opportunistic, sensitive to rumors and conservative. These psychological biases were confirmed either by examining the correlation between variables or by the aggregation of all these variables in factorial axes.
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Bibliographic InfoPaper provided by Economic Research Forum in its series Working Papers with number 0717.
Length: 32 pages
Date of creation: Dec 2007
Date of revision: Dec 2007
Publication status: Published by The Economic Research Forum (ERF)
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