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Mental Accounting, Loss Aversion, and Individual Stock Returns / Nicholas Barberis, Ming Huang.

NBER Working papers Available online

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Format:
Book
Author/Creator:
Barberis, Nicholas.
Contributor:
National Bureau of Economic Research.
Huang, Ming.
Series:
Working Paper Series (National Bureau of Economic Research) no. w8190.
NBER working paper series no. w8190
Language:
English
Physical Description:
1 online resource: illustrations (black and white);
Place of Publication:
Cambridge, Mass. National Bureau of Economic Research 2001.
Summary:
We study equilibrium firm-level stock returns in two economies: one in which investors are loss averse over the fluctuations of their stock portfolio and another in which they are loss averse over the fluctuations of individual stocks that they own. Both approaches can shed light on empirical phenomena, but we find the second approach to be more successful: in that economy, the typical individual stock return has a high mean and excess volatility, and there is a large value premium in the cross-section which can, to some extent, be captured by a commonly used multifactor model.
Notes:
Print version record
March 2001.

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