Skip to main content

Main menu

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JOI
    • Editorial Board
    • Published Ahead of Print (PAP)
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

User menu

  • Sample our Content
  • Request a Demo
  • Log in

Search

  • ADVANCED SEARCH: Discover more content by journal, author or time frame
The Journal of Investing
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • Sample our Content
  • Request a Demo
  • Log in
The Journal of Investing

The Journal of Investing

ADVANCED SEARCH: Discover more content by journal, author or time frame

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JOI
    • Editorial Board
    • Published Ahead of Print (PAP)
  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

Two Inconsistent Behavioral Biases

Joshua Livnat, Duo (Selina) Pei and Dan Segal
The Journal of Investing October 2022, 31 (6) 13-26; DOI: https://doi.org/10.3905/joi.2022.1.233
Joshua Livnat
is a professor emeritus of accounting in the Stern School of Business at New York University and managing director and senior advisor at PGIM Quantitative Solutions in New York, NY
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
Duo (Selina) Pei
is an assistant professor at the University of Warwick in Warwick, UK
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
Dan Segal
is a professor at Reichman University in Herzlia, Israel
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
  • Article
  • Info & Metrics
  • PDF (Subscribers Only)
Loading

Click to login and read the full article.

Don’t have access? Click here to request a demo 

Alternatively, Call a member of the team to discuss membership options
US and Overseas: +1 646-931-9045
UK: 0207 139 1600

Abstract

Our study explores two well-known anomalies that seem to be inconsistent with one another. Investors underreact to extreme quarterly earnings surprises resulting in returns drift that may persist for several quarters. This behavioral bias suggests that investors believe that extreme earnings surprises are mostly transitory during the earnings announcement period, but modify their beliefs later as new information arrives in subsequent quarters. In contrast, investors overreact to extreme performance of mutual funds; they pour more money into mutual funds that have recent outstanding performance and withdraw funds from mutual funds that have recently experienced extreme low performance. As these extreme patterns in performance tend to reverse in subsequent quarters, this behavior by investors suggests they erroneously consider most of the extreme performance to be permanent. We do not attempt to explain this inconsistency for retail investors but provide a potential explanation for this behavior among professional investors.

  • © 2022 Pageant Media Ltd
View Full Text

Don’t have access? Click here to request a demo

Alternatively, Call a member of the team to discuss membership options

US and Overseas: +1 646-931-9045

UK: 0207 139 1600

Log in using your username and password

Forgot your user name or password?
PreviousNext
Back to top

Explore our content to discover more relevant research

  • By topic
  • Across journals
  • From the experts
  • Monthly highlights
  • Special collections

In this issue

The Journal of Investing: 31 (6)
The Journal of Investing
Vol. 31, Issue 6
October 2022
  • Table of Contents
  • Index by author
  • Complete Issue (PDF)
Print
Download PDF
Article Alerts
Sign In to Email Alerts with your Email Address
Email Article

Thank you for your interest in spreading the word on The Journal of Investing.

NOTE: We only request your email address so that the person you are recommending the page to knows that you wanted them to see it, and that it is not junk mail. We do not capture any email address.

Enter multiple addresses on separate lines or separate them with commas.
Two Inconsistent Behavioral Biases
(Your Name) has sent you a message from The Journal of Investing
(Your Name) thought you would like to see the The Journal of Investing web site.
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.
Citation Tools
Two Inconsistent Behavioral Biases
Joshua Livnat, Duo (Selina) Pei, Dan Segal
The Journal of Investing Sep 2022, 31 (6) 13-26; DOI: 10.3905/joi.2022.1.233

Citation Manager Formats

  • BibTeX
  • Bookends
  • EasyBib
  • EndNote (tagged)
  • EndNote 8 (xml)
  • Medlars
  • Mendeley
  • Papers
  • RefWorks Tagged
  • Ref Manager
  • RIS
  • Zotero
Save To My Folders
Share
Two Inconsistent Behavioral Biases
Joshua Livnat, Duo (Selina) Pei, Dan Segal
The Journal of Investing Sep 2022, 31 (6) 13-26; DOI: 10.3905/joi.2022.1.233
del.icio.us logo Digg logo Reddit logo Twitter logo Facebook logo Google logo LinkedIn logo Mendeley logo
Tweet Widget Facebook Like LinkedIn logo

Jump to section

  • Article
    • Abstract
    • POST EARNINGS ANNOUNCEMENT DRIFT (PEAD)
    • MUTUAL FUND FLOWS
    • A POTENTIAL EXPLANATION FOR THE ABOVE INCONSISTENT BEHAVIORS
    • SUMMARY AND CONCLUSIONS
    • ACKNOWLEDGMENT
    • ENDNOTES
    • REFERENCES
  • Info & Metrics
  • PDF (Subscribers Only)
  • PDF (Subscribers Only)

Similar Articles

Cited By...

  • No citing articles found.
  • Google Scholar
LONDON
One London Wall, London, EC2Y 5EA
United Kingdom
+44 207 139 1600
 
NEW YORK
41 Madison Avenue, New York, NY 10010
USA
+1 646 931 9045
reply@pm-research.com
 

Stay Connected

  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

MORE FROM PMR

  • Home
  • Awards
  • Investment Guides
  • Videos
  • About PMR

INFORMATION FOR

  • Academics
  • Agents
  • Authors
  • Content Usage Terms

GET INVOLVED

  • Advertise
  • Publish
  • Article Licensing
  • Contact Us
  • Subscribe Now
  • Log In
  • Update your profile
  • Give us your feedback

© 2023 With Intelligence Ltd | All Rights Reserved | ISSN: 1068-0896 | E-ISSN: 2168-8613

  • Site Map
  • Terms & Conditions
  • Cookies
  • Privacy Policy