Abstract: The efficient market venture (EMH) could not be supported by most of the confirmable researches results in 1980s. Previous studies which are related to the model of appearance imply that some non-rational investors would invest anomalies in certain market. In 1979, Kahneman and Tversky suggested to make the prospect theory as an optional plectron which was expected utility when it came to describe investors behaviors.
Based on forward works (Lichtenstein, Fischhoff and Phillips, 1982; Shefrin and Statman, 1985), this paper checked the overconfidence influence, the mental explanation, the hatred of regret and the self-control with the disposition effect of selling winners alike early and holding losers excessively long. The results of data analysis on 290 investors demonstrate that there are four psychological factors having coarse influence on the disposition effect.
The researches show that: (a) overconfidence, mental accounting and self- control would proceed the disposition effect positively, and (b) self-control would affect the disposition effect negatively. Therefore self-control could bring down pat(p) the investorsirrational behaviors.
Introduction
An old Wall Street adage states that cardinal factors move the market: fear and greed. Although true, this characterization is far too simplistic. The human mind is rattling sophisticated, and human emotions are very complex. The emotions of fear and greed just dont adequately describe the psychology that affects people. Few other texts provide this discipline beca implement traditional finance has focused on developing the tools that investors use to optimize expected return and risk. This endeavor has been fruitful, yielding tools much(prenominal) as asset pricing models, portfolio theories, and option pricing. Although investors should use these tools in their investment...If you want to get a full essay, order it on our website: Ordercustompaper.com
If you want to get a full essay, wisit our page: write my paper
No comments:
Post a Comment