@article{ab37c84401dc433bb6116f4e275e74b9,
title = "Taming the bias zoo",
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{\textquoteright} 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.",
keywords = "Bias zoo, Excessive trading, Gambling preference, Perceived information advantage",
author = "Hongqi Liu and Cameron Peng and Xiong, {Wei A.} and Wei Xiong",
note = "Funding Information: We thank David Hirshleifer (the editor), an anonymous referee, Nick Barberis, Hui Chen, Thummim Cho, James Choi, Bing Han, Rawley Heimer, Sam Hartzmark, Xing Huang, Lawrence Jin, Christian Julliard, Terry Odean, S{\o}ren Leth-Petersen, Andrei Shleifer, Johannes Stroebel, Martin Weber, and seminar participants at Baruch, the CEPR Household Finance Workshop, Chapman, CUHK Shenzhen, Imperial College, INSEAD, LSE, the NBER Behavioral Finance Meeting, Princeton, the Red Rock Finance Conference, and Tilburg. Cameron Peng acknowledges financial support from the Paul Woolley center at the LSE. Wei A. Xiong acknowledges support from the National Natural Science Foundation of China (Project Number 71703104 ). An earlier version of this paper was circulated under the title “Resolving the Excessive Trading Puzzle: An Integrated Approach Based on Surveys and Transactions.” This study has received exemption from Princeton IRB and LSE Research Ethics. Funding Information: We thank David Hirshleifer (the editor), an anonymous referee, Nick Barberis, Hui Chen, Thummim Cho, James Choi, Bing Han, Rawley Heimer, Sam Hartzmark, Xing Huang, Lawrence Jin, Christian Julliard, Terry Odean, S?ren Leth-Petersen, Andrei Shleifer, Johannes Stroebel, Martin Weber, and seminar participants at Baruch, the CEPR Household Finance Workshop, Chapman, CUHK Shenzhen, Imperial College, INSEAD, LSE, the NBER Behavioral Finance Meeting, Princeton, the Red Rock Finance Conference, and Tilburg. Cameron Peng acknowledges financial support from the Paul Woolley center at the LSE. Wei A. Xiong acknowledges support from the National Natural Science Foundation of China (Project Number 71703104). An earlier version of this paper was circulated under the title ?Resolving the Excessive Trading Puzzle: An Integrated Approach Based on Surveys and Transactions.? This study has received exemption from Princeton IRB and LSE Research Ethics. Publisher Copyright: {\textcopyright} 2021 Elsevier B.V.",
year = "2022",
month = feb,
doi = "10.1016/j.jfineco.2021.06.001",
language = "English (US)",
volume = "143",
pages = "716--741",
journal = "Journal of Financial Economics",
issn = "0304-405X",
publisher = "Elsevier",
number = "2",
}