Asset Price Response to New Information: The Effects of Conservatism Bias and Representativeness Heuristic (SpringerBriefs in Finance)

__Asset Price Response to New Information__ examines the effect of two types of psychological biases (namely, conservatism bias and representativeness heuristic) on the asset price reaction to new information. The author constructs various models of a competitive securities market or a security market allowing for strategic interaction among traders to prove rigorously that either conservatism or representativeness is capable of generating both asset price overreaction and underreaction to new information. The results shed some new insights on the phenomena of the asset price overreaction and underreaction to new information. In the literature, very little has been published in this area of behavioral finance. This volume will appeal to graduate-level students and researchers in finance, behavioral finance, and financial engineering. Front Matter....Pages i-vii Introduction....Pages 1-4 Conservatism Bias and Asset Price Overreaction or Underreaction to New Information in a Competitive Securities Market....Pages 5-14 Conservatism Bias and Asset Price Overreaction or Underreaction to New Information in the Presence of Strategic Interaction....Pages 15-25 Representativeness Heuristic and Asset Price Overreaction or Underreaction to New Information in a Competitive Securities Market....Pages 27-39 Representativeness Heuristic and Asset Price Overreaction or Underreaction to new Information in the Presence of Strategic Interaction....Pages 41-51 The Presence of Representativeness Heuristic and Conservatism Bias in an Asset Market....Pages 53-63 Conclusion....Pages 65-65 Back Matter....Pages 67-70