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Does the Stock Market Overreact
Research in experimental psychology suggests that, in violation of Bayes' rule, most people tend to "overreact" to unexpected and dramatic news events. This study of market efficiency investigates
Further Evidence On Investor Overreaction and Stock Market Seasonality
In a previous paper, we found systematic price reversals for stocks that experience extreme long-term gains or losses: Past losers significantly outperform past winners. We interpreted this finding
Behavioral Finance: Quo Vadis?
Behavioral finance endeavors to bridge the gap between finance and psychology. Now an established field, behavioral finance studies investor decision processes which in turn shed light on anomalies,
Herding in analyst earnings forecasts: evidence from the United Kingdom
We present an empirical analysis of herding behavior in analyst forecasts of earnings‐per‐share. Herding is defined as ‘excessive agreement’ among analyst predictions, i.e., a surprising degree of
Stock Price Reversals and Overreaction to News Events: A Survey of Theory and Evidence
Stock price reversals may be due to short-term overreactions to news, waves of unjustified optimism or pessimism about future earnings, fear and normatively “excessive” risk premia, or other causes.