In this paper I analyze investors’ reactions to changes in the expense ratios of equity mutual funds. I show that investment flows’ response to fees cannot be fully explained by looking at investors’ performance sensitivity. While performance sensitivity monotonically increases with past performance, price sensitivity does not: investors who buy top past performers seem to be “distracted” by th...

Investors significantly reduce their future returns by selecting mutual funds with higher fees, allured by higher past returns that do not predict future performance. This suboptimal behavior, which can roughly halve an investor’s retirement savings, is driven by two psychological factors. One factor is difficulty comprehending rate information, which is critical given that mutual fund fees and...

having knowledge about behavioral biases, investors are able to evaluate their decision process with more awareness and they can react much better when facing such biases, as a result decisions deviation will be minimized. in this study, 36 different behavioral biases have been categorized into 5 different groups to normalize the effective behavioral biases in the process of decision making of ...

This research aims to determine the effect of firm value and institutional investors on herding behavior. The newnes this add an indicator that have never been used for measurement value. existence previous result not conclusive raise empirical gaps population are worthy re-study. is carried out using Book Market Ratio Firm Size. size uses company's ownership, behavior Cross-Sectional Absolute ...

Theoretical research as well as empirical evidence offer mixed results regarding individual investor trading strategies and motives behind them. Are investors trading on information or are they simply trying to predict prices based on fads and/or behavioral biases? If investors follow certain patterns, what are those – trend-chasing or contrarian? Do investors watch closely news related to stoc...