Behavioral Finance and Investor Psychology
Emotionally intelligent investors may be better at resisting their own biases
New research from Indian stock investors suggests emotional intelligence can weaken the grip of confirmation bias on financial decisions, while risk perception and herd behavior remain strong influences.
Do artists work less when handed free money? This study says no
When 2,400 New York artists received $1,000 a month with no strings attached, they spent more hours on creative work and fewer on outside jobs, even as their market earnings fell. A look at what the experiment revealed.
When the weight comes off: what GLP-1 drugs reveal about the penalty women pay for body size
A Harvard economist used the rapid uptake of GLP-1 weight-loss drugs to ask where body weight matters for women. The answer, her analysis suggests, is mostly at first impressions: new relationships and new jobs.
New study finds California’s fast-food wage hike lifted pay without cutting employment
California's $20 fast-food minimum wage was predicted to wipe out jobs. A new working paper finds pay rose about 7 percent while employment barely changed, with quits falling sharply at covered chains.
Do volatile stocks make people trade like gamblers? A new experiment says yes
A controlled experiment with 604 gamblers found that more volatile stock prices led to significantly more trading, with the effect strongest among low-risk gamblers often overlooked by harm-prevention efforts.
Why a bad memory can make you fear higher inflation
A survey experiment on more than 4,000 Dutch households found that prompting people to recall a personal hardship, even one that revealed nothing about the economy, pushed their inflation and home-price forecasts higher.
Can lottery-like stocks actually boost momentum returns? A six-decade study says yes
Lottery-like stocks usually disappoint investors. But a new study finds that pairing them with a momentum strategy flips the script, producing returns far above the standard approach, mostly because the losers crash harder.
What happens inside a trader’s head when the market turns against them?
A three-day trading simulation with eight students reveals how cognitive biases shift hour by hour when markets turn sour, with loss aversion dominating even when the money is virtual.
Crypto’s “ecology of noise” and how investors try to survive it
A study of nineteen cryptocurrency investors finds that being flooded with conflicting information often produces exhaustion, anxiety, and snap decisions, suggesting that in crypto markets, more information can mean worse choices.
Can ChatGPT outperform a human financial planner? A controlled experiment weighs in
A new experiment pitting human financial advisors against ChatGPT found that AI and hybrid advice led to better projected portfolio outcomes, largely because participants were more willing to follow the recommendations.