We model the dynamic survival of earnings fixated investors in a competitive securities market that allows for learning and arbitrage and that is populated by heterogeneous investors. Our model is distinct from those based on aggressive trading by overconfident investors. We prove that in the...

This paper examines the impact on market efficiency of traders who are behaving conservatively in their trading activities to avoid potential losses. To date, the consensus in the literature has been that the presence of well informed traders is necessary for achieving market efficiency. In...

This paper examines the impact of earnings fixated traders on the asset price in a competitive securities market. In the market, there is a risky asset whose payoff is normally distributed. Earnings fixated traders underestimate the mean and variance of the asset payoff due to the fact that...