a r t i c l e i n f o The literature on short-selling restrictions focusses mainly on a ban's impact on market efficiency, liquidity and overpricing. Surprisingly, little is known about the effects of short-sale constraints on herd behaviour. Since institutional investors have come to dominate mature stock markets and rely extensively on short sales, constraining these traders may influence the...

Investor behavior and investment activities are strongly influenced by the risk tolerance level of individual investors. International evidence suggests that lower risk tolerant investors are generally risk averse. However, their demographic characteristics and socioeconomic factors drive their risk attitudes. This study aims at investigating the critical role that age, gender, marital/social s...

This paper proposes an alternative explanation for the price impact of trades created by information that is carried in the order ßow. Unlike models that consider information asymmetry about the future cash ßows (or liquidation value) of the asset, the approach here postulates uncertainty about the distribution of preferences and endowments of investors. This “investor uncertainty” results in p...

4 Non-technical summary 5 1 Introduction 7 2 Related literature 11 3 The model 14 3.1 Setup 14 3.2 Stationary equilibria 18 4 Characterizing equilibrium flows and returns 19 4.1 The evolution of beliefs 20 4.2 Optimal portfolio choice 22 4.3 Equilibrium prices, predictability and hedging 24 4.4 Equilibrium flows and returns 26 5 Data 29 5.1 Dividends 29 5.2 Equity flows 32 5.2.1 Data sources 32...

Intelligent investors differ from speculative or non-professional in the fact that intelligent act countercyclically; is, they against trend, otherwise, buy when prices have already fallen and sell their rate of selected investment has risen. An example countercyclical behavior can also be explained by thinking professional investor Warren Buffett, who points out a simple rule: "Be scared other...

Crowdfunding, Cascades and Informed Investors Do higher proportions of (a) informed investors and (b) high-quality projects increase the number of good projects that are ultimately financed via crowdfunding? A simple model and simulation reveals the answers to both questions to be: ‘not necessarily’. JEL Classification: L26, C63, G23

normal today. The 1960 volume of the Financial Analysts Journal contains a pair of remarkable articles. In the first, “The Case for an Unmanaged Investment Company,” Edward Renshaw and Paul Feldstein compared the returns of mutual funds to those of the DJIA and found that only 11 of 89 diversified common stock and balanced funds had returns higher than those of the DJIA. This and similar eviden...

We examine the impact of business angels on 182 Series A financings and subsequent company outcomes. Our studied rounds have a varied mix of business angel and formal venture capital investors (VCs). We find that when only angels participate in a financing round and VCs are absent, control rights are more entrepreneur-friendly, legal expenses are lower, and investors are more geographically pro...

Empirical evidence indicates that trades by institutional investors have sizable effects on asset prices, generating phenomena such as index effects, asset-class effects and others. It is difficult to explain such phenomena within standard representative-agent asset pricing models. In this paper, we consider an economy populated by institutional investors alongside standard retail investors. In...