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Chairs Research Seminar Series: Henrik Cronqvist : Claremont McKenna College : November 27
10:00 AM to 11:30 AM
Henrik Cronqvist of Claremont McKenna College will present "Why Do Individuals Exhibit Investment Biases?" on Tuesday, November 27.
Henrik Cronqvist is the McMahon Family Chair in Corporate Finance, George R. Roberts Fellow, and Associate Professor of Financial Economics at the Robert Day School of Economics and Finance at Claremont McKenna College. His research interests include corporate finance, behavioral finance, and individual investor behavior. He has published in top-journals in finance and economics, including the American Economic Review, Journal of Finance, Journal of Financial Economics, and the Review of Financial Studies. More of his work can be found at https://sites.google.com/site/henrikcronqvist/Research.
Abstract: For a long list of investment "biases,'' e.g., home bias, loss aversion, and performance chasing, we find that genetic differences explain up to 45% of the variation across individual investors. The genetic factors that influence investment biases are also found to affect behaviors in other, non-investment, domains. This evidence is consistent with a view that investment biases are manifestations of innate and evolutionary ancient features of human behavior. The environment an investor experiences also affects investment biases, either directly or as a moderator of genetic predispositions. For example, we find that work-related experience with finance seems to reduce genetic predispositions to investment biases, while general education does not. Finally, even genetically identical investors, who grow up in the same family environment, often differ substantially in their investment behaviors due to individual-specific experiences or events.
Business School Dean's Office
Ellen PetersonTel 408-554-4523