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Confidence, opinions of market efficiency, and investment behavior of finance professors

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  • Doran, James S.
  • Peterson, David R.
  • Wright, Colby

Abstract

We identify finance professors' opinions on the efficiency of the stock markets in the United States and assess whether their views on efficiency influence their investing behavior. Employing a survey distributed to over 4,000 professors, we obtain four main results. First, most professors believe the market is weak to semi-strong efficient. Second, twice as many professors passively invest than actively invest. Third, our respondents' perceptions regarding market efficiency are almost entirely unrelated to their trading behavior. Fourth, the investment objectives of professors are, instead, largely driven by the same behavioral factor as for amateur investors-one's confidence in his own abilities to beat the market, independent of his opinion of market efficiency.

Suggested Citation

  • Doran, James S. & Peterson, David R. & Wright, Colby, 2010. "Confidence, opinions of market efficiency, and investment behavior of finance professors," Journal of Financial Markets, Elsevier, vol. 13(1), pages 174-195, February.
    • Handle: RePEc:eee:finmar:v:13:y:2010:i:1:p:174-195
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Links (18-25/02)
      by Roberto Ushisima in Empresas e Mercados on 2011-02-26 03:10:00
    2. Opiniões sobre eficiência de mercado e comportamento como investidor
      by Roberto Ushisima in Empresas e Mercados on 2011-02-28 07:03:00

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    11. Sepehr Ghazinoory & Amir Khorasani & Ali Asghar Anvari Rostamy & Ghazaleh Taheriattar & Mona Rashidirad, 2016. "Performance appraisals of ICT companies in the Tehran stock market: contradiction with the global trend," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 29(1), pages 529-544, January.
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