Taming the bias zoo

Hongqi Liu, Cameron Peng, Wei A. Xiong, Wei Xiong

Research output: Contribution to journalArticlepeer-review

24 Scopus citations


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 languageEnglish (US)
Pages (from-to)716-741
Number of pages26
JournalJournal of Financial Economics
Issue number2
StatePublished - Feb 2022

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics
  • Strategy and Management


  • Bias zoo
  • Excessive trading
  • Gambling preference
  • Perceived information advantage


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