We estimate how an acquiring firm's risk changes depending on whether the market initially judges the acquisition to be neutral, strongly negative, or strongly positive for the shareholders of the acquiring firm. We found that for an average neutral acquisition, the annualized standard deviation...

We estimate how an acquiring firm’s risk changes depending on whether the market initially judges the acquisition to be neutral, strongly negative, or strongly positive for the shareholders of the acquiring firm. We find that for an average neutral acquisition, the annualized standard...

Why do most financial decision-making models fail to factor in basic human nature? This guide to what really influences the decision-making process applies psychological research to stock selection, financial services and corporate financial strategy.

The main goal of this Element is to provide a psychological explanation for why actual global climate policy is so greatly at odds with the prescriptions of most neoclassical economists. To be sure, the behavioral approach does focus on why neoclassical models are often psychologically...

We find that individual investors who use technical analysis and trade options frequently make poor portfolio decisions, resulting in dramatically lower returns than other investors. The data on which this claim is based consists of transaction records and matched survey responses of a sample of...

This paper presents results based on new data showing that the relationships involving investors' judgments of risk and variables such as beta, size, and book-to-market equity (B/M) have the same directional effects as those involving realized returns. Moreover, the relationships involving risk...

Because of limits to arbitrage, it is reasonable for sell-side analysts' target prices to deviate from their corresponding estimates of future fundamental value. Although this inequality does not imply that sell-side analysts should provide biased estimates of fundamental value, many do. A key...