Investor Memory and Biased Beliefs: Evidence from the Field
We survey a large representative sample of retail investors in China to elicit their memories of stock market investment and return expectations. We...
High-frequency trading in the stock market and the costs of options market making
Journal of Financial Economics, 159, 103900
The Law of Small Numbers in Financial Markets: Theory and Evidence
We build a model of the law of small numbers (LSN)—the incorrect belief that even small samples represent the properties of the underlying population...
Centralized vs Decentralized Markets: The Role of Connectivity
We consider a setting in which privately informed agents are located in a network and trade a risky asset with other agents with whom they are...
Putting the Price in Asset Pricing
We propose a novel way to estimate a portfolio’s abnormal price, the percentage gap between price and the present value of dividends computed with a...
Long-Horizon Exchange Rate Expectations
We study exchange rate expectations in surveys of financial professionals and find that they successfully forecast currency appreciation at the two...
Reaching for Yield: Evidence from Households
The existing literature has documented “reaching for yield” - the phenomenon of investing more in risky assets when interest rates drop - among...
Cleansing by tight credit: Rational cycles and endogenous lending standards
Journal of Financial Economics, 150(1), 46-67
On the Fragility of DeFi Lending
We develop a dynamic model of DeFi lending that incorporates the following key features: 1) borrowing and lending are decentralized, anonymous...
Personality Differences and Investment Decision-Making
We survey thousands of affluent American investors to examine the relationship between personalities and investment decisions. The Big Five...
