An experimental asset market is used to test the effect of news concerning the underlying value of an asset on its trading price. Participants were divided into two groups and received different expected earnings values. Statistical support is found for the hypothesis that investors underreact...

We discuss research that quantifies the effects of changes in valuation, price trend, volatility and money supply on stock prices. A recent uptrend is shown to have a positive effect on daily return provided the uptrend is below a critical value. Above that value there is a negative effect. A...