Abstract
The success of behavioral economics has led to a new challenge: many biases offer observationally similar predictions for a targeted financial anomaly. To tame this bias zoo, we combine subjective survey responses with observational data to propose a new approach, one that is robust to question-specific biases introduced through surveys. We illustrate this approach by administering a nationwide survey of Chinese retail investors to elicit their trading motives. In cross-sectional regressions of respondents’ actual turnover on survey-based trading motives, perceived information advantage and gambling preference dominate other motives, though they are not the most prevalent biases based on survey responses.
Original language | English (US) |
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Pages (from-to) | 716-741 |
Number of pages | 26 |
Journal | Journal of Financial Economics |
Volume | 143 |
Issue number | 2 |
DOIs | |
State | Published - Feb 2022 |
All Science Journal Classification (ASJC) codes
- Accounting
- Finance
- Economics and Econometrics
- Strategy and Management
Keywords
- Bias zoo
- Excessive trading
- Gambling preference
- Perceived information advantage