American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Investor Sentiments
American Economic Journal: Microeconomics
vol. 2,
no. 1, February 2010
(pp. 21–38)
Abstract
We consider a general class of games that have been used to model many economic problems where players' sentiments are believed to play an important role. Dropping the common prior assumption, we identify the relevant notion of sentiments for strategic behavior in these games. This notion is tied to how likely a player thinks that some other player has a more optimistic outlook than himself when they obtain their private information. Under this notion, we show that sentiments have a profound effect on strategic outcomes -- even with vanishing uncertainty. (JEL C73, D82, D83, G11)Citation
Izmalkov, Sergei, and Muhamet Yildiz. 2010. "Investor Sentiments." American Economic Journal: Microeconomics, 2 (1): 21–38. DOI: 10.1257/mic.2.1.21JEL Classification
- C73 Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
- D82 Asymmetric and Private Information
- D83 Search; Learning; Information and Knowledge; Communication; Belief
- G11 Portfolio Choice; Investment Decisions
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