Asset Price Response to New Information

The Effects of Conservatism Bias and Representativeness Heuristic

  • Guo Ying Luo

Part of the SpringerBriefs in Finance book series (BRIEFSFINANCE)

About this book

Introduction

Asset Price Response to New Information examines the effect of two types of psychological biases (namely, conservatism bias and representativeness heuristic) on the asset price reaction to new information. The author constructs various models of a competitive securities market or a security market allowing for strategic interaction among traders to prove rigorously that either conservatism or representativeness is capable of generating both asset price overreaction and underreaction to new information. The results shed some new insights on the phenomena of the asset price overreaction and underreaction to new information. In the literature, very little has been published in this area of behavioral finance. This volume will appeal to graduate-level students and researchers in finance, behavioral finance, and financial engineering.

Keywords

Asset Pricing Auction Markets Market Behavior Natural Selection Trading Mechanisms

Authors and affiliations

  • Guo Ying Luo
    • 1
  1. 1.DeGroote School of BusinessMcMaster UniversityHamiltonCanada

Bibliographic information

  • DOI https://doi.org/10.1007/978-1-4614-9369-3
  • Copyright Information The Author(s) 2014
  • Publisher Name Springer, New York, NY
  • eBook Packages Business and Economics
  • Print ISBN 978-1-4614-9368-6
  • Online ISBN 978-1-4614-9369-3
  • Series Print ISSN 2193-1720
  • Series Online ISSN 2193-1739
  • About this book
Industry Sectors
Pharma
Automotive
Chemical Manufacturing
Biotechnology
Oil, Gas & Geosciences