How the investors react to the received information plays a crucial role in determining the return of stock exchange market. Supply and demand based upon incorrect decisions lead to the price deviation of inherent values. This paper aims to study the impact of salience phenomenon on disproportionate pricing and investor overreaction in the corporates in Tehran stock exchange. Research methodolo...

A substantial body of empirical literature provides evidence for overreaction in markets. Past losers outperform past winners in stock markets as well as in sports markets. Two hypotheses are consistent with this observation. First, the recency hypothesis states that traders overweigh recent information. Thus, they are too optimistic about winners and too pessimistic about losers. Second, the h...

This paper tests risk and overreaction explanations of the book-to-market equity (BE/ME) premium in returns by focusing on the joint relationship between distress and BE/ME. Within the most distressed firms, the difference in returns between high and low book-to-market securities is more than twice as large as that in non-distressed firms, and is largely driven by extremely low returns on firms...