Details

Proximity Bias in Investors' Portfolio Choice


Proximity Bias in Investors' Portfolio Choice



von: Ted Lindblom, Taylan Mavruk, Stefan Sjögren

118,99 €

Verlag: Palgrave Macmillan
Format: PDF
Veröffentl.: 06.08.2017
ISBN/EAN: 9783319547626
Sprache: englisch

DRM-geschütztes eBook, Sie benötigen z.B. Adobe Digital Editions und eine Adobe ID zum Lesen.

Beschreibungen

This book helps readers understand the widely documented distortion in the portfolio choice of individual investors toward proximate firms – the proximity bias phenomenon. First, it recapitulates the fundamentals of modern portfolio theory. It then goes on to describe and demonstrate different approaches on how to measure proximity bias and identifies and examines potential motives and reasons for such a bias. In addition, the book presents new analysis on the financial effects of individual investors’ proximity bias, explaining and contributing with possible policy implications on their portfolio distortion. This book will be of interest to students and researchers, as well as decision-makers in business firms and households.
Chapter 1: Investor portfolio choice and portfolio theory.- Chapter 2: Decision-making—Rational, Bounded or Behaviorally biases.- Chapter 3: Market efficiency and the standard asset pricing models used to test market efficiency.- Chapter 4: The Financial Behavior of Individual Investors.- Chapter 5: The Measurement of Proximity Bias.- Chapter 6: Motives and Reasons for Proximity bias.- Chapter 7: Local Bias and Capital Structure.- Chapter 8: Local news and active trading.- Chapter 9: Portfolio rebalancing by individual investors and flight to safety.- Chapter 10. The relation between local bias, international home bias and financial sophistication.- Chapter 11: Conclusions and implications.
Ted Lindblom is a Professor at the School of Business, Economics and Law at the University of Gothenburg, Sweden. His current research focuses on bank regulation and corporate finance with a particular focus on corporate governance, capital budgeting and financial structure decisions. Taylan Mavruk is an Assistant Professor of Business Administration in Finance at the School of Business, Economics and Law at the University of Gothenburg, Sweden. His research focuses on empirical portfolio choice, home bias, local bias, and insider trading. Stefan Sjögren is an Associate Professor in the Department of Business Administration at the School of Business, Economics and Law, at the University of Gothenburg, Sweden. His research interests cover a broad range of corporate finance issues and include publications on valuation, capital structure, venture capital, capital budgeting, deregulation, law and finance and efficiency measurement.
This book helps readers understand the widely documented distortion in the portfolio choice of individual investors toward proximate firms – the proximity bias phenomenon. First, it recapitulates the fundamentals of modern portfolio theory. It then goes on to describe and demonstrate different approaches on how to measure proximity bias and identifies and examines potential motives and reasons for such a bias. In addition, the book presents new analysis on the financial effects of individual investors’ proximity bias, explaining and contributing with possible policy implications on their portfolio distortion. This book will be of interest to students and researchers, as well as decision-makers in business firms and households.  
Provides a detailed discussion of the economic cost of proximity biasExpands on the impacts of proximity bias beyond portfolio diversification to the welfare of households and the cost of capital for firmsDiscusses the validity of different measurement methodsIssues are explored at both the household level and the firm level