A Theory of Fads, Fashion, Custom, and Cultural Change as Informational Cascades
- S. Bikhchandani, D. Hirshleifer, I. Welch
- Psychology, BiologyJournal of Political Economy
- 1 March 1992
It is argued that localized conformity of behavior and the fragility of mass behaviors can be explained by informational cascades.
Investor Psychology and Asset Pricing
- D. Hirshleifer
- Economics
- 26 February 2001
The basic paradigm of asset pricing is in vibrant flux. The purely rational approach is being subsumed by a broader approach based upon the psychology of investors. In this approach, security…
Presentation Slides for 'Investor Psychology and Security Market Under and Overreactions'
- Kent D. Daniel, D. Hirshleifer, A. Subrahmanyam
- Economics
- 1 December 1998
We propose a theory of securities market under- and overreactions based on two well-known psychological biases: investor overconfidence about the precision of private information; and biased…
Are Overconfident CEOs Better Innovators?
- D. Hirshleifer, A. Low, S. Teoh
- Business
- 10 October 2011
Previous empirical work on adverse consequences of CEO overconfidence raises the question of why firms would hire overconfident managers. Theoretical research suggests a reason, that overconfidence…
Good Day Sunshine: Stock Returns and the Weather
- D. Hirshleifer, Tyler Shumway
- Economics
- 28 March 2001
Psychological evidence and casual intuition predict that sunny weather is associated with upbeat mood. This paper examines the relationship between morning sunshine in the city of a country's leading…
Limited Attention, Information Disclosure, and Financial Reporting
- D. Hirshleifer, S. Teoh
- Economics, Business
- 1 September 2003
This paper models firms’ choices between alternative means of presenting information, and the effects of different presentations on market prices when investors have limited attention and processing…
Learning from the behavior of others : conformity, fads, and informational cascades
- S. Bikhchandani, D. Hirshleifer, I. Welch
- Psychology
- 1 August 1998
Learning by observing the past decisions of others can help explain some otherwise puzzling phenomena about human behavior. For example, why do people tend to converge on similar behavior? Why is…
Driven to Distraction: Extraneous Events and Underreaction to Earnings News
- D. Hirshleifer, S. Lim, S. Teoh
- Business
- 16 April 2007
Recent studies propose that limited investor attention causes market underreactions. This paper directly tests this explanation by measuring the information load faced by investors. The "investor…
Does Investor Misvaluation Drive the Takeover Market?
- Ming Dong, D. Hirshleifer, Scott Richardson, S. Teoh
- Economics, Business
- 28 September 2003
This paper tests the hypothesis that irrational market misvaluation affects firms' takeover behavior. We employ two contemporaneous proxies for market misvaluation, pre-takeover book/price ratios and…
Behavioral Finance
- D. Hirshleifer
- Economics, Psychology
- 15 August 2014
Behavioral finance studies the application of psychology to finance, with a focus on individual-level cognitive biases. I describe here the sources of judgment and decision biases, how they affect…
...
...