The relationship of investor’s overreaction/underreaction and investor’s psychological biases

• Main Authors: Pi-Hsuan Chen, 陳弼鉉
• Other Authors: Teng-Tsai Tu
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/a8vweb

碩士 === 銘傳大學 === 財務金融學系碩士班 === 97 === This study mainly investigates the behavioral factors influencing the investors’ overreaction and underreaction. Barberis, Shleifer and Vishny (1998) indicate that representativeness heuristic and conservatism influence investors’ overreaction and underreaction. Daniel, Hirsheifer and Subramanyam (1998) indicate that overconfidence and self-attribution bias influence investors’ overreaction and underreaction. Based on their studies and other literature with regard to overreaction and underreaction, this study proposes a conceptual model to investigate the relationship among investors’ behavioral factors, overreaction/underreaction and performance. This study employs Structure Equation Model (SEM) to conduct empirical analysis for the data of questionnaire survey. The empirical results reveal that heuristic and overconfidence positively influence investors’ overreaction and underreaction, and investors’ underreaction negatively affects investors’ performance. The impact of overconfidence on investors’ performance is positive. Furthermore, the relationships among investor’s psychological biases and overreaction/underreaction exhibit significant difference between the investors of finance field and non-finance field.