How value–glamour investors use financial information: UK evidence of investors’ confirmation bias

Article


Duong, C., Pescetto, G. and Santamaria, D. 2014. How value–glamour investors use financial information: UK evidence of investors’ confirmation bias. The European Journal of Finance. 20 (6), pp. 524-549. https://doi.org/10.1080/1351847X.2012.722117
AuthorsDuong, C., Pescetto, G. and Santamaria, D.
Abstract

This paper investigates how investors in value and glamour stocks use financial information. The empirical evidence presented is in line with a model of investors’ asymmetric reaction to good and bad news due to confirmation bias. Pessimistic value investors typically under-react to good financial information, while 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, while they are likely to fairly price or even over-react when receiving good information.

JournalThe European Journal of Finance
Journal citation20 (6), pp. 524-549
ISSN1351-847X
Year2014
PublisherTaylor & Francis
Digital Object Identifier (DOI)https://doi.org/10.1080/1351847X.2012.722117
Publication dates
Online07 Nov 2012
Publication process dates
Accepted10 Aug 2012
Deposited14 Jan 2022
Copyright holder© 2012 Taylor & Francis
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