Human Behavior and Investment
This paper reports the result of an experiment wherein subjects deal with the biases people face while trying to invest in a security. In this experiment, subjects' ask was to invest in a security whose worth had been predetermined using statistical means over a 16 period time framework. The findings suggest that when subjects make mistakes in their estimation of the worth of a security in a given period, their investment behavior changes in the next period. However, in a few cases, investment behavior did not change. The findings from this research have important implications in not only the business world but also can be used for financial statement analysis. This also extends our understanding of how investors estimate the worth of a security.
School:
University of Illinois at Springfield
Department:
Accounting
Research Advisor:
Ananda Ganguly
Department of Research Advisor:
Accounting
Year of Publication:
2002