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Asymmetric behavior in the stock market

by Wildnauer-Haigney, Kyle

Abstract

The efficient market hypothesis fails to fully explain market behavior. Behavioral economics is a new field that contributes insights to stock market analysis. Throughout history there have been many panics and crashes, with the most recent one being the 2008 housing bubble. This thesis seeks to find evidence and explain, through behavioral economic theory, why investors panic and behave irrationally to bad news. It will utilize the asymmetric utility function along with other behavioral economic theory to find evidence through the market reaction to good quarterly earnings reports and bad quarterly earnings reports. This thesis hopes to show that good news and bad news of equal magnitude result in different reactions in the stock market, as measured through share price and trading volume.

Note

bachelor

Bachelor of Arts

Includes bibliographical references.

Administrative Notes

None

Copyright
Copyright restrictions apply.
Publisher
Colorado College
PID
coccc:3351
Digital Origin
born digital
Extent
56 pages : illustrations
Thesis
Senior Thesis -- Colorado College
Thesis Advisor
Smith, Mark
Department/Program
Department of Economics and Business
Degree Name
bachelor
Degree Type
Bachelor of Arts
Degree Grantor
Colorado College
Date Issued
2011