search query: @author Heaton, J. B. / total: 2
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| Author: | Brav, A. Heaton, J. B. |
| Title: | Competing Theories of Financial Anomalies |
| Journal: | Review of Financial Studies
2002 : SUMMER, VOL. 15:2, p. 575-606 |
| Index terms: | COMPETITION THEORIES FINANCE FINANCIAL ANALYSIS |
| Language: | eng |
| Abstract: | The authors compare two competing theories of financial anomalies "behavioral" theories built on investor irrationality, and "rational structural uncertainty" theories built on incomplete information about the structure of the economic environment. The authors find that although the theories relax opposite assumptions of the rational expectations ideal, their mathematical and predictive similarities make them difficult to distinguish. Even if irrationality generates financial anomalies, their disappearance still may hinge on rational learning-that is on the ability of rational arbitrageurs and their investors to reject competing rational explanations for observed price patterns. |
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