Availability heuristic and reversals following large stock price changes: Evidence from the FTSE 100

dc.contributor.authorMatos, Diogo
dc.contributor.authorPacheco, Luís Miguel
dc.contributor.authorLobão, Júlio
dc.date.accessioned2022-02-18T09:51:52Z
dc.date.available2022-02-18T09:51:52Z
dc.date.issued2022-02-15
dc.description.abstractThis paper examines if investors exhibited evidence of the availability heuristic in their investment decisions when significant price changes occurred in the British stock market during the 2010–2018 period. We raise the hypothesis that if a significant stock price move takes place on a day when the stock market index also undergoes a significant change (either positive or negative), then the magnitude of that shock may be increased by the availability of positive investment or negative outcomes. We applied three different proxies for large stock price changes which yielded a robust sample of events for this study. We found no significant evidence of the availability heuristic. In addition, we also found no significant evidence of price overreaction for both price decreases and increases. Inversely, we found robust results that suggest randomness in the behavior of stock prices in this period, thus supporting the efficiency of financial markets and opposing the results from similar studies carried out in the United States.pt_PT
dc.identifier.citationMatos, D., Pacheco, L., & Lobão, J. (2022). Availability heuristic and reversals following large stock price changes: Evidence from the FTSE 100. Quantitative Finance and Economics, 6(1), 54-82. doi: 10.3934/QFE.2022003. Disponível no Repositório UPT, http://hdl.handle.net/11328/3934pt_PT
dc.identifier.doi10.3934/QFE.2022003pt_PT
dc.identifier.issn2573-0134 (Electronic)
dc.identifier.urihttp://hdl.handle.net/11328/3934
dc.language.isoengpt_PT
dc.peerreviewedyespt_PT
dc.publisherAIMS Presspt_PT
dc.relation.publisherversionhttps://www.aimspress.com/article/doi/10.3934/QFE.2022003pt_PT
dc.rightsopen accesspt_PT
dc.rights.urihttp://creativecommons.org/licenses/by/4.0/pt_PT
dc.subjectLarge stock price changespt_PT
dc.subjectUnited Kingdompt_PT
dc.subjectOverreactionpt_PT
dc.subjectBehavioral financept_PT
dc.subjectAvailability heuristicpt_PT
dc.subjectMarket efficiencypt_PT
dc.titleAvailability heuristic and reversals following large stock price changes: Evidence from the FTSE 100pt_PT
dc.typejournal articlept_PT
degois.publication.firstPage54pt_PT
degois.publication.issue1pt_PT
degois.publication.lastPage82pt_PT
degois.publication.titleQuantitative Finance and Economicspt_PT
degois.publication.volume6pt_PT
dspace.entity.typePublicationen

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