Confidence, Opinions of Market Efficiency, and Investment Behavior of Finance Professors

25 Pages Posted: 13 Aug 2007 Last revised: 26 Jul 2012

James Doran

Implied Capital Advisors

David R. Peterson

Florida State University - Department of Finance

Colbrin Wright

Brigham Young University

Date Written: August 10, 2007

Abstract

This paper examines finance professors' collective opinion on the efficiency of US stock markets and whether their views on the markets' efficiency influence their investing behavior. We survey close to 4,000 professors, with an 18% response rate and find that most professors tend to believe US stock markets are weak to semi-strong efficient. Interestingly, their individual views on efficiency are not related to their trading behavior. The primary driver of a finance professor's propensity to actively invest is one's confidence in his own abilities to beat the market, regardless of his opinion of the efficiency of the US stock market.

Keywords: Market Efficiency, Investor Confidence, Investment Decisions, Behavioral Finance

JEL Classification: G11, G14

Suggested Citation

Doran, James and Peterson, David R. and Wright, Colbrin, Confidence, Opinions of Market Efficiency, and Investment Behavior of Finance Professors (August 10, 2007). Journal of Financial Markets, Vol. 13, No. 1, pp. 174-195, February 2010. Available at SSRN: https://ssrn.com/abstract=1006237

James Doran

Implied Capital Advisors ( email )

1942 Broadway Suite 409
Boulder, CO 80302
United States

David R. Peterson

Florida State University - Department of Finance ( email )

Tallahassee, FL 32306-1042
United States
850-644-8200 (Phone)
850-644-4225 (Fax)

Colbrin Wright (Contact Author)

Brigham Young University ( email )

United States
(801) 422 1224 (Phone)

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