Investor Psychology and Asset Pricing

92 Pages Posted: 28 Mar 2001  

David A. Hirshleifer

University of California, Irvine - Paul Merage School of Business; NBER

Multiple version iconThere are 2 versions of this paper

Date Written: February 26, 2001

Abstract

The basic paradigm of asset pricing is in vibrant flux. The purely rational approach is being subsumed by a broader approach based upon the psychology of investors. In this approach, security expected returns are determined by both risk and misvaluation. This survey sketches a framework for understanding decision biases, evaluates the a priori arguments and the capital market evidence bearing on the importance of investor psychology for security prices, and reviews recent models.

Suggested Citation

Hirshleifer, David A., Investor Psychology and Asset Pricing (February 26, 2001). AFA 2001 New Orleans Meetings. Available at SSRN: https://ssrn.com/abstract=265132 or http://dx.doi.org/10.2139/ssrn.265132

David A. Hirshleifer (Contact Author)

University of California, Irvine - Paul Merage School of Business ( email )

Irvine, CA California 92697-3125
United States

HOME PAGE: http://sites.uci.edu/dhirshle/

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Paper statistics

Downloads
7,543
Rank
542
Abstract Views
19,300