We study the effect of variation in correlation on investment decision in an experimental two asset application. Comparison of allocations across problems suggests that subjects neglect probabilistic information on the joint distribution of returns and base their allocations on the observed...

Global trade determines how we live. Technology determines the extent of the market and the ease of trade. The transportation revolution reduced costs and cut travel times. The communication revolution (ICT) improved the quality and quantity of information in the global market and cut the cost...

When households make financial decisions, one may expect them to be both informative and rational – just as any other financial agent. In this paper, we question whether this hypothesis is error-free and correct by using a unique large-scale event study. Our results do not support the axioms...

For many years accounting was based on historical data while finance was based on expected future data. This difference creates a gap between accounting and finance regarding issues like the values of assets held by companies and liabilities, including equity, issued by them. IFRS in general and...

We analyze the impact role of advertising on the net inflows of pension funds, using a unique database that includes monthly information, asset allocation and the Flow of Funds (FoF) for all the pension funds in Israel. We also obtain the monthly $-value advertising per fund. Using these...

In this paper we study long-term learning process under the conditions of ambiguous information. We study a unique empirical setting in which pieces of the ambiguous information are sequentially provided to institutional investors. We use parametric and non-parametric models to show that the...