Do behavioral biases affect prices ?

Deskripsi

This paper documents strong evidence for behavioral biases among Chicago Board of trade proprietary traders and investigates the effect these biases have on prices. Our traders appear highly loss-averse, regularly assuming above-average afternoon risk to recover from morning losses. This behavior has important short-term consequences for afternoon prices, as losing traders actively purchase contracts at higher prices and sell contracts at lower prices than those that prevailed previously..Printed Journal