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What’s in a Name? An Experimental Examination of Investment Behavior

  • Lucy Ackert
  • Bryan Church
  • James Tompkins
  • Ping Zhang

A fundamental unresolved issue is whether information asymmetries underlie investors’ predisposition to invest close to home (i.e., domestically or locally). We conduct experiments in the United States and Canada to investigate agents’ portfolio allocation decisions, controlling for the availability of information. Providing participants with information about a firm’s home base, without disclosing its specific identity, is not sufficient to change investment behavior. Rather, participants need to know a firm’s name and home base. Additional evidence indicates that participants have a greater perceived familiarity with local and domestic securities and, in turn, invest more in such securities. Copyright Springer 2005

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Article provided by Springer in its journal Review of Finance.

Volume (Year): 9 (2005)
Issue (Month): 2 (06)
Pages: 281-304

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Handle: RePEc:kap:eurfin:v:9:y:2005:i:2:p:281-304
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