How value-glamour investors use financial information: UK evidence of investor's confirmation bias

Doung, C., Pescetto, G. and Santamaria, D. (2014) How value-glamour investors use financial information: UK evidence of investor's confirmation bias. The European Journal of Finance, 20 (6). pp. 524-549. ISSN 1351-847X.

This is the latest version of this item.

[img]
Preview
PDF
PESCETTO_2012_pre_EJF_How_value-glamour_investors_use_financial_information.pdf

Download (1MB)

Abstract

The paper investigates investor’s behaviour in the context of value–glamour investing and fundamental analysis, and provides a direct test of the confirmation bias by bringing together the evidence from several strands of literature into a well-defined framework of investor behaviour. The empirical evidence presented is in line with a model of
investor’s asymmetric reaction to good and bad news due to confirmation bias. Pessimistic value investors typically under-react to good financial information, but they process bad information rationally or over-confidently. On the contrary, glamour investors are often too optimistic to timely update prices following bad financial information, but they are likely to fairly price or even over-react when receiving good information.

Item Type: Article
Uncontrolled Keywords: Value–glamour investing; financial statement analysis; contextual fundamental analysis; market efficiency; behavioural finance; confirmation bias
Subjects: H Social Sciences > HG Finance
Divisions: pre Nov-2014 > Faculty of Business and Management > Department of Accounting, Finance & Information Management
Depositing User: Dr Daniel Santamaria
Date Deposited: 11 Dec 2014 17:02
Last Modified: 23 Jan 2016 12:29
URI: https://create.canterbury.ac.uk/id/eprint/12967

Available Versions of this Item

  • How value-glamour investors use financial information: UK evidence of investor's confirmation bias. (deposited 11 Dec 2014 17:02) [Currently Displayed]

Actions (login required)

Update Item (CReaTE staff only) Update Item (CReaTE staff only)

Downloads

Downloads per month over past year

View more statistics

Share

Connect with us

Last edited: 29/06/2016 12:23:00