Managerial Overconfidence and Market Feedback Effects

References

• Amador M, Weill PO (2010) Learning from prices: Public communication and welfare. J. Political Econom. 118(5):866–907.Crossref, Google Scholar
• Amihud Y (2002) Illiquidity and stock returns: Cross-Section and time-series effects. J. Financial Markets 5(1):31–56.Crossref, Google Scholar
• Anton M, Polk C (2014) Connected stocks. J. Finance 69(3):1099–1127.Crossref, Google Scholar
• Banerjee S, Humphery-Jenner M, Nanda V (2015) Restraining overconfident CEOs through improved governance: Evidence from the Sarbanes-Oxley Act. Rev. Financial Stud. 28(10):2812–2858.Crossref, Google Scholar
• Banerjee S, Humphery-Jenner M, Nanda V (2018) Does CEO bias escalate repurchase activity? J. Banking Finance 93(1):105–126.Crossref, Google Scholar
• Barber B, Odean T (2001) Boys will be boys: Gender, overconfidence, and common stock investment. Quart. J. Econom. 116(1):261–292.Crossref, Google Scholar
• Ben-David I, Graham JR, Harvey CR (2013) Managerial miscalibration. Quart. J. Econom. 128(4):1547–1584.Crossref, Google Scholar
• Berger E (2021) Does stock mispricing drive firm policies? Mutual fund fire sales and selection bias. J. Financial Quant. Anal. Forthcoming. https://jfqa.org/2021/09/16/selection-bias-in-mutual-fund-fire-sales/.Google Scholar
• Bond P, Edmans A, Goldstein I (2012) The real effects of financial markets. Annual Rev. Financial Econom. 4:339–360.Crossref, Google Scholar
• Bond P, Goldstein I, Prescott E (2010) Market-based corrective actions. Rev. Financial Stud. 23(2):781–820.Crossref, Google Scholar
• Camerer C, Lovallo D (1999) Overconfidence and excess entry: An experimental approach. Amer. Econom. Rev. 89(1):306–318.Crossref, Google Scholar
• Cespa G, Foucault T (2014) Illiquidity contagion and liquidity crashes. Rev. Financial Stud. 27(6):1615–1660.Crossref, Google Scholar
• Chen Q, Goldstein I, Jiang W (2007) Price informativeness and investment sensitivity to stock price. Rev. Financial Stud. 20(3):620–650.Crossref, Google Scholar
• Choi S, Kahan M (2007) The market penalty for mutual fund scandals. Bull. Rev. 87:1021–1057.Google Scholar
• Coval J, Stafford E (2007) Asset fire sales (and purchases) in equity markets. J. Financial Econom. 86(2):479–512.Crossref, Google Scholar
• Daniel K, Hirshleifer D (2015) Overconfident investors, predictable returns, and excessive trading. J. Econom. Perspect. 29(4):61–88.Crossref, Google Scholar
• Daniel K, Hirshleifer D, Subrahmanyam A (1998) Investor psychology and security market under- and overreactions. J. Finance 53(6):1839–1885.Crossref, Google Scholar
• Daniel KD, Hirshleifer D, Subrahmanyam A (2001) Overconfidence, arbitrage, and equilibrium asset pricing. J. Finance 56(3):921–965.Crossref, Google Scholar
• Dasgupta A (2007) Coordination and delay in global games. J. Econom. Theory 134(1):195–225.Crossref, Google Scholar
• David JM, Hopenhayn HA, Venkateswaran V (2016) Information, misallocation, and aggregate productivity. Quart. J. Econom. 131(2):943–1005.Crossref, Google Scholar
• Davis J, Gondhi N (2019) Learning in financial markets: Implications for debt-equity conflicts. Working paper, University of North Carolina, Chapel Hill.Google Scholar
• De Long JB, Shleifer A, Summers LH, Waldmann RJ (1991) The survival of noise traders in financial markets. J. Bus. 64(1):1–19.Crossref, Google Scholar
• Dessaint O, Foucault T, Frésard L, Matray A (2019) Noisy stock prices and corporate investment. Rev. Financial Stud. 32(7):2625–2672.Crossref, Google Scholar
• Dong M, Hirshleifer DA, Teoh SH (2020) Misvaluation and corporate inventiveness. J. Financial Quant. Anal. 56(8):1–46.Google Scholar
• Dow J, Gorton G (1997) Stock market efficiency and economic efficiency: Is there a connection? J. Finance 52(3):1087–1129.Crossref, Google Scholar
• Dow J, Rahi R (2003) Informed trading, investment, and economic welfare. J. Bus. 76(3):439–454.Crossref, Google Scholar
• Dow J, Goldstein I, Guembel A (2017) Incentives for information production in markets where prices affect real investment. J. Eur. Econom. Assoc. 15(4):877–909.Google Scholar
• Easley D, O’Hara M, Yang L (2016) Differential access to price information in financial markets. J. Financial Quant. Anal. 51(4):1071–1110.Crossref, Google Scholar
• Edmans A (2009) Blockholder trading, market efficiency, and managerial myopia. Rev. Financial Stud. 64:2481–2513.Google Scholar
• Edmans A, Goldstein I, Jiang W (2012) The real effects of financial markets: The impact of prices on takeovers. J. Finance 67(3):933–971.Crossref, Google Scholar
• Edmans A, Goldstein I, Jiang W (2015) Feedback effects, asymmetric trading, and the limits to arbitrage. Amer. Econom. Rev. 105(12):3766–3797.Crossref, Google Scholar
• Edmans A, Jayaraman S, Schneemeier J (2017) The source of information in prices and investment-price sensitivity. J. Financial Econom. 126(1):74–96.Crossref, Google Scholar
• Ellul A, Jotikasthira C, Lundblad C (2011) Regulatory pressure and fire sales in the corporate bond market. J. Financial Econom. 101(3):596–620.Crossref, Google Scholar
• Fajgelbaum PD, Schaal E, Taschereau-Dumouchel M (2017) Uncertainty traps. Quart. J. Econom. 132(4):1641–1692.Crossref, Google Scholar
• Fama EF, French KR (1992) The cross-section of expected stock returns. J. Finance 47(2):427–465.Crossref, Google Scholar
• Foucault T, Frésard L (2012) Cross-listing, investment sensitivity to stock price, and the learning hypothesis. Rev. Financial Stud. 25(11):3305–3350.Crossref, Google Scholar
• Foucault T, Fresard L (2014) Learning from peers’ stock prices and corporate investment. J. Financial Econom. 111(3):554–577.Crossref, Google Scholar
• Foucault T, Gehrig T (2008) Stock price informativeness, cross-listings, and investment decisions. J. Financial Econom. 88(1):146–168.Crossref, Google Scholar
• Galasso A, Simcoe TS (2011) CEO overconfidence and innovation. Management Sci. 57(8):1469–1484.Link, Google Scholar
• Gao P, Liang PJ (2013) Informational feedback, adverse selection, and optimal disclosure policy. J. Accounting Res. 51(5):1133–1158.Crossref, Google Scholar
• Gervais S, Goldstein I (2007) The positive effects of biased self-perceptions in firms. Rev. Finance 11(3):453–496.Crossref, Google Scholar
• Gervais S, Odean T (2001) Learning to be overconfident. Rev. Financial Stud. 14(1):1–27.Crossref, Google Scholar
• Goldstein I, Guembel A (2008) Manipulation and the allocational role of prices. Rev. Econom. Stud. 75(1):133–164.Crossref, Google Scholar
• Goldstein I, Ozdenoren E, Yuan K (2013) Trading frenzies and their impact on real investment. J. Financial Econom. 109(2):566–582.Crossref, Google Scholar
• Gompers P, Ishii J, Metrick A (2003) Corporate governance and equity prices. Quart. J. Econom. 118(1):107–155.Crossref, Google Scholar
• Gopalan R, Kadan O, Pevzner M (2012) Asset liquidity and stock liquidity. J. Financial Quant. Anal. 47(2):333–364.Crossref, Google Scholar
• Graham JR, Harvey CR, Puri M (2013) Managerial attitudes and corporate actions. J. Financial Econom. 109(1):103–121.Crossref, Google Scholar
• Han B, Yang L (2013) Social networks, information acquisition, and asset prices. Management Sci. 59(6):1444–1457.Link, Google Scholar
• Han B, Tang Y, Yang L (2016) Public information and uninformed trading: Implications for market liquidity and price efficiency. J. Econom. Theory 163:604–643.Crossref, Google Scholar
• Hau H, Lai S (2013) Real effects of stock underpricing. J. Financial Econom. 108(2):392–408.Crossref, Google Scholar
• Hellwig C, Mukherji A, Tsyvinski A (2006) Self-fulfilling currency crises: The role of interest rates. Amer. Econom. Rev. 96(5):1769–1787.Crossref, Google Scholar
• Hirshleifer D, Luo GY (2001) On the survival of overconfident traders in a competitive securities market. J. Financial Marketing 4(1):73–84.Crossref, Google Scholar
• Hirshleifer D, Low A, Teoh SH (2012) Are overconfident CEOs better innovators? J. Finance 67(4):1457–1498.Crossref, Google Scholar
• Hirshleifer D, Subrahmanyam A, Titman S (2006) Feedback and the success of irrational investors. J. Financial Econom. 81(2):311–338.Crossref, Google Scholar
• Hong H, Kubik JD, Fishman T (2012) Do arbitrageurs amplify economic shocks? J. Financial Econom. 103(3):454–470.Crossref, Google Scholar
• Honkanen P, Schmidt D (2018) Learning from noise? Price and liquidity spillovers around mutual fund fire sales. Rev. Asset Pricing Stud. 12(2):593–637.Crossref, Google Scholar
• Huang J, Wang J (2009) Liquidity and market crashes. Rev. Financial Stud. 22(7):2607–2643.Crossref, Google Scholar
• Huang J, Wang J (2010) Market liquidity, asset prices, and welfare. J. Financial Econom. 95(1):107–127.Crossref, Google Scholar
• Huang S, Qiu Z, Yang L (2020) Institutionalization, delegation, and asset prices. J. Econom. Theory 186:104977.Crossref, Google Scholar
• Huang S, Xiong Y, Yang L (2021) Skill acquisition and data sales. Management Sci. 68(8):6116–6144.Link, Google Scholar
• Jayaraman S, Wu JS (2019) Is silence golden? Real effects of mandatory disclosure. Rev. Financial Stud. 32(6):2225–2259.Crossref, Google Scholar
• Johnson D, Fowler J (2011) The evolution of overconfidence. Nature 477:317–320.Crossref, Google Scholar
• Kaplan S, Sorensen M, Zakolyukina A (2020) What is CEO overconfidence? Evidence from executive assessments. Becker Friedman Institute (2020-115).Google Scholar
• Kau J, Linck J, Rubin P (2008) Do managers listen to the market? J. Corporate Finance 14(1):347–362.Crossref, Google Scholar
• Koch A, Ruenzi S, Starks L (2016) Commonality in liquidity: A demand-side explanation. Rev. Financ. Stud. 29(8):1943–1974.Crossref, Google Scholar
• Kyle AS (1985) Continuous auctions and insider trading. Econometrica 53:1315–1336.Crossref, Google Scholar
• Kyle AS, Wang FA (1997) Speculation duopoly with agreement to disagree: Can overconfidence survive the market test? J. Finance 52(5):2073–2090.Crossref, Google Scholar
• Lou D (2012) A flow-based explanation for return predictability. Rev. Financial Stud. 25(12):3457–3489.Crossref, Google Scholar
• Lou X, Wang AY (2018) Flow-induced trading pressure and corporate investment. J. Financial Quant. Anal. 53(1):171–201.Crossref, Google Scholar
• Luo Y (2005) Do insiders learn from outsiders? Evidence from mergers and acquisitions. J. Finance 60(4):1951–1982.Crossref, Google Scholar
• Malmendier U, Tate G (2005a) CEO overconfidence and corporate investment. J. Financial Econom. 60(6):2661–2700.Google Scholar
• Malmendier U, Tate S (2005b) Does overconfidence affect corporate investment? CEO overconfidence measures revisited. Eur. Financial Management 11(5):649–659.Crossref, Google Scholar
• Malmendier U, Tate G (2008) Who makes acquisitions? CEO overconfidence and the market’s reaction. J. Financial Econom. 89:20–43.Crossref, Google Scholar
• McCabe PE (2009) The economics of the mutual fund trading scandal. Working paper, https://www.federalreserve.gov/econres/feds/the-economics-of-the-mutual-fund-trading-scandal.htm.Google Scholar
• Ordonez GL (2013) The asymmetric effects of financial frictions. J. Political Econom. 121(5):844–895.Google Scholar
• Ozoguz A, Rebello MJ, Wardlaw M (2018) Information, competition, and investment sensitivity to peer stock prices. Preprint, submitted May 3, https://dx.doi.org/10.2139/ssrn.3164386.Google Scholar
• Phua K, Tham M, Wei C (2018) Can being overconfident make you a better leader? Harvard Bus. Rev. https://hbr.org/2018/06/can-being-overconfident-make-you-a-better-leader.Google Scholar
• Pulvino T (1998) Do fire-sales exist? An empirical study of commercial aircraft transactions. J. Finance 53(3):939–978.Crossref, Google Scholar
• Puri M, Robinson DT (2007) Optimism and economic choice. J. Financial Econom. 86(1):71–99.Crossref, Google Scholar
• Simsek Z, Heavy C, Veiga JF (2010) The impact of CEO core self-evaluation on the firm’s entrepreneurial orientation. Strategic Management J. 31(1):110–119.Crossref, Google Scholar
• Subrahmanyam A, Titman S (1999) The going public decision and the development of financial markets. J. Finance 54(3):1045–1082.Crossref, Google Scholar
• Subrahmanyam A, Titman S (2001) Feedback from stock prices to cash flows. J. Finance 56(6):2389–2413.Crossref, Google Scholar
• The Economist (2008) Hedge funds in trouble: The incredible shrinking funds. The Economist, October 25, 87–88.Google Scholar
• van Binsbergen JH, Opp CC (2019) Real anomalies. J. Finance 74(4):1659–1706.Crossref, Google Scholar
• Van Nieuwerburgh S, Veldkamp L (2006) Learning asymmetries in real business cycles. J. Monetary Econom. 53(4):753–772.Crossref, Google Scholar
• Vayanos D, Wang J (2011) Theories of liquidity. Foundations Trends Finance 6(4):221–317.Crossref, Google Scholar
• Veldkamp LL (2005) Slow boom, sudden crash. J. Econom. Theory 124(2):230–257.Crossref, Google Scholar
• Wardlaw M (2020) Measuring mutual fund flow pressure as shock to stock returns. J. Finance 75(6):3221–3243.Crossref, Google Scholar
• Zitzewitz EW (2009) Prosecutorial discretion in mutual fund settlement negotiations, 2003-7. B.E. J. Econom. Anal. Policy 9(1).Google Scholar
• Zuo L (2016) The informational feedback effect of stock prices on management forecasts. J. Accounting Econom. 61(2):391–413.Crossref, Google Scholar