Perspectives on Behavioral Finance: Does "Irrationality" Disappear with Wealth? Evidence from Expectations and Actions

@article{VissingJorgensen2003PerspectivesOB,
  title={Perspectives on Behavioral Finance: Does "Irrationality" Disappear with Wealth? Evidence from Expectations and Actions},
  author={Annette Vissing-Jorgensen},
  journal={NBER Macroeconomics Annual},
  year={2003},
  volume={18},
  pages={139 - 194}
}
This paper discusses the current state of the behavioral finance literature. I argue that more direct evidence about investors' actions and expectations would make existing theories more convincing to outsiders and would help sort behavioral theories for a given asset pricing phenomenon. Evidence on the dependence of a given bias on investor wealth/sophistication would be useful for determining if the bias could be due to (fixed) information or transaction costs or is likely to require a… Expand
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