I analyze a large number of investment decisions based on theories that have been developed and formalized over the past 50 years. Previous work in this field unveils a number of biases which affect ones choices when the outcome is uncertain. In my thesis I find evidence of these already known biases and focus on finding rational explanations for their existence. I also introduce two unexplored biases; the homeboy bias and the menu bias. The results clearly indicate that sophisticated investors are generally less subject to these biases. Since pension schemes in many nations are shifting towards defined contribution schemes, investment decisions and risk preferences will be of great consequence to investors’ personal economy and ability to consume, affecting the economy in general. It is therefore of great importance that policy makers do all that they can to increase investors sophistication and create a playing field which facilitates economically sound investing.

本文以2008年金融海嘯為分界點，由於在事前並沒有一個投資大師以及機構法人能夠精準的預測金融海嘯發生，海嘯發生之後幾乎使得市場上所有的投資人 都面臨虧損，不但金融權威一夕崩解，一向以報導「大師投資法」的媒體業也必須重新找尋新的出路，透過尋找神奇致富的素人取代失寵的名人與大師，報導其相關投資方法，來吸引一般投資大眾，以刺激其銷量。隨後，報章雜誌也相繼報導許多神奇致富故事，媒體一時之間變成「富翁製造機」，透過電視媒體加以延伸、渲染，閱聽大眾眼之所見、耳之所聞，都是唾手可得的賺錢妙方與密技，時下投資人紛紛起而效尤，期待自己能成為下一個大戶，投資市場上充滿了「樂透式」的投資氛圍。 本研究係作者本人長期的觀察與調查，發現很多名人或是素人，固然也有腳踏 實力，努力鑽研，創造財富的案例，也有不少案例在媒體的報導與引用上，因為採取「隱惡揚善」，甚至誇大賺錢、神奇致富的一面，對於賠錢部分卻是絕口不提，其次，大部分散戶投資人都希望能有捷徑或是透過學習、複製的方式，來進行投資理財，殊不知是用自己一知半解的想法進行投資，期待能於股市中發點小財，而且只看「結果」下的投資決策，會讓投資大眾產生錯覺，很容易失之偏頗。 所以，本研究的進行，期望達到下列目的： 1. 收集與整理相關媒體銷售的資料，了解目前散戶偏好的投資意見為何。 2. 針對受訪談的媒體從業人員所提供之意見進行歸納比較，進而探討名人與素人透過媒體管道所提供給散戶的投資建議，是否為一正確、可信之投資意見。 3. 最後，根據本研究之相關結論，並提出適當意見，做為媒體自律與散戶在投資理財上的建議。 / This study will investigate and analyze the changed role of the media industry as a 'rich making machine' since the financial crisis of 2008. The financial meltdown served as a turning point for the media since there were no investment gurus or corporate bodies that accurately had predicted the development. Virtually all investors in the market faced losses and many investment celebrities lost their credibility. Subsequently newspapers and magazines turned to rich and successful people to replace them and stimulating their sales by reporting miraculous rich stories. They are selling recipes how to make money to a willing audience, members of the investing public eager to become the next investment guru. Stimulated by this, the 'lottery' type of investment is in full swing on the market. Through long‐term observation and investigation we found that, first, many of the business celebrities actually based their success on a solid foundation, strove to study and then created wealth. Many of the media reports, however, tend to overly focus on the virtues and exaggerate the money making 'magic rich' side, while on the other hand neglecting or even covering up failures and bad deeds. Secondly, many investors are looking for a shortcut to create riches and try to copy others supposedly successful investment models without real understanding of market mechanisms and easily become misled by biased media reporting. This study is expected to achieve the following purposes: (1) Collect and collate information related to media sales, retail preferences in order to understand the preferences of all investors. (2) Conduct interviews with media practitioners, collect their opinions, summarize and compare them. Then discuss the advise given by investment celebrities given through the media pipeline and check if this advise is correct or credible. (3) Based on the findings of this study propose a self‐regulating body for the media and give recommendations for potential investors.

The objective of the thesis is to examine the trading behaviour and characteristics of retail and institutional traders on the Australian Stock Exchange. There are three aspects of these traders that are of particular interest to this study: (1) the information content of their trades, (2) their order placement strategies, and (3) the impact of their trading on share price volatility. Trades made on the basis of private information such as those by institutional traders are found to be associated with larger permanent price changes while trades by uninformed traders such as retail traders are found to be associated with smaller changes. In addition, institutional trades are found to have smaller total price effect compared to retail trades suggesting retail traders incur higher market impact costs. In order to profit from potentially short-lived information advantage, informed traders are expected to place more aggressive orders. The analysis of the order price aggressiveness showed institutions are more aggressive than other traders. In addition, retail traders are found to be less aware of the state of the market when placing aggressive orders. The analysis of the limit order book found significant differences between the contributions of institutional and retail traders to the depth of the limit-order book, with retail standing limit orders further from the market. This is consistent with the conjecture that uninformed traders such as retail traders have greater expected adverse selection costs. The effect of trading by retail and institutional traders on price volatility are also investigated. There is some evidence that retail traders are more active and institutional traders are proportionally less active after periods of high volatility. Also, the effect of the order activity from different trader types on volatility differs depending on the measure of order activity used.

Thesis (Ph.D.)--University of Wollongong, 2007. / Typescript. Includes bibliographical references: leaf 168-189.

Thesis (Ph. D.)--University of Canterbury, 2006. / "February 2006." Typescript (photocopy). Includes bibliographical references (leaves 136-144). Also available via the World Wide Web.

Cette thèse est composée de quatre chapitres qui contribuent à une meilleure connaissance des comportements d’échange des investisseurs individuels et de leur performance. Dans le premier chapitre, nous réalisons la première étude consacrée aux performances de portefeuille des investisseurs individuels français. A partir d’une base de données de plus de 8 millions de transactions réalisées par 56 723 investisseurs, nous montrons que les investisseurs français affichent des rentabilités ajustées au risque négatives sur leurs portefeuilles et font des choix d’investissement pénalisants. De plus, nous mettons en évidence que les investisseurs les plus sophistiqués ne sont pas plus performants que leurs pairs.Dans le second chapitre, nous montrons que l’aspiration individuelle constitue un déterminant clé pour expliquer l’hétérogénéité des performances de portefeuille. Nous définissons les aspirations selon la Théorie Comportementale du Portefeuille. Les investisseurs qui ont de fortes aspirations détiennent des portefeuilles plus risqués, échangent plus fréquemment et diversifient moins que les investisseurs ayant de faibles aspirations. En contrôlant de la fréquence des échanges, de la diversification et des facteurs de risque habituels, nous montrons que les investisseurs ayant de fortes aspirations sous-performent les investisseurs ayant de faibles aspirations.Dans le troisième chapitre nous analysons les performances des investisseurs individuels via des mesures adaptées à leurs préférences. Lorsque leurs performances sont évaluées avec ces mesures plutôt qu’avec le ratio de Sharpe, une plus grande part des investisseurs bat l’indice de marché. Cette observation jette un regard nouveau sur les capacités de gestion des investisseurs individuels. Cependant, nous montrons que l’amélioration des performances est liée à la skewness des portefeuilles plutôt qu’à une sélection de titres pertinente.Dans le dernier chapitre, nous explorons les comportements de rachat des investisseurs individuels. Nous montrons que les investisseurs préfèrent racheter (1) les titres pour lesquels ils ont réalisé une plus-value lors de la vente (2) les titres dont le prix a diminué depuis la vente. Nos tests excluent les explications rationnelles et confirment que l’évitement du regret est à l’origine de tels comportements. Sur la base d’une analyse de survie, nous montrons que les investisseurs sophistiqués sont moins sujets à ces préférences. / This dissertation is composed of four chapters that make a substantial contribution to existing knowledge of the trading behavior and performance of individual investors. The first chapter provides the most extensive study of the trading performance of French individual investors to date. Based on a large database of nearly 8 million trades realized by56,723 investors, we show that French investors exhibit negative risk-adjusted returns on their portfolios, and make penalizing choices in their trades. We find that more sophisticated investors do not perform better than their peers, and we conclude that investors would gain more from applying a passive strategy. In the second chapter, we evidence that individual aspiration is a key determinant of existing heterogeneity in portfolio performance. We define aspirations according to the Behavioral Portfolio Theory. Investors who have high aspirations hold riskier portfolios, trade more frequently and diversify less than investors who have low aspirations. After controlling for turnover, diversification and usual risk factors, we find that investors with high aspirations underperform investors with low aspirations.In the third chapter we highlight alternative measures of performance that efficiently convey the real preferences of investors. When they are evaluated with these alternative measures rather than with the Sharpe ratio, a higher proportion of investors beat the market index. This observation challenges the global evidence that individual investors are poor portfolio managers. However, our evidence suggests that the improvement of an investor’s performance is linked to portfolio skewness rather than relevant stock selection.In the last chapter, we explore the repurchase behavior of individual investors. We find that French investors prefer to repurchase (1) stocks that have been sold for a gain and (2) stocks that have lost value since their sale. Our tests exclude rational explanations for these preferences and confirm our hypothesis that such patterns can be traced to the avoidance of regret in trades. We use survival analysis to demonstrate that sophisticated investors suffer less from there purchase preferences.

This dissertation studies topics in Passive Investing and Asset Pricing. The first chapter, "When do flows matter for asset prices: Evidence from adoption of ETF creation in Israel," focuses on the effect of capital allocation to passive investments on asset prices. We study a 2012 reform in Israel where all exchange traded products listed on the Tel Aviv Stock Exchange (TASE) adopted the Exchange Traded Fund (ETF) creation mechanism wherein designated market makers arbitrage between the index price and the net asset value of its benchmark. The reform greatly decreased the cost of this arbitrage activity and translated into a significant increase in demand for passive investments. The effect was stronger for illiquid indices containing smaller stocks. We show that the price effects of the reform were dramatically higher for stocks located at the top of indices composed of smaller stocks relative to stocks at the bottom of indices composed of bigger stocks. A 1 p.p. increase in passive ownership as a percent of market capitalization leads to an 11.7% increase in the price of stocks. Our findings provide new evidence on how passive inflows can change the distribution of capital across indices, and in turn impact price efficiency. In the second chapter, "Passive Investing and Algorithmic Trading," I examine the trading behavior of market participants against the growing demand for passive investing. I show that the growth of passive investing and algorithmic trading is complementary and mutually reinforcing. Algorithmic traders respond to a spike in demand for passive investments listed on the TASE following a major reform in the Israeli index market in 2012 by front-running the index inflows. Algorithmic traders accumulate stocks when index inflows are low and sell stocks when they are high. Based on this strategy, algorithmic traders earn a 12.7% annualized return in realized gains over passive strategies in the same period. Instead, Mutual Funds load on the index when inflows are high.

L'étude est effectuée sur la base d'un échantillon de 13.000 clients d'un courtier en ligne et 1,3M de mouvements d'achats et de vente de valeurs mobilières durant le période Janvier 2006 - Juin 2008. Nous démontrons 1/ Grâce à des régressions linéaires, que les investisseurs individuels français présentent un comportement contrarian par rapport aux évolutions de l'indice domestique. Ils achètent quand le marché baisse et vendent quand le marché monte. Ce résultat est cohérent avec la littérature sur les "noise traders" et la liquidité du marché.2/ sous la forme de régressions logistiques, que la sophistication (approximée par l'utilisation du SRD) est un facteur d'accroissement de la décision d'achat.Ces résultats ouvrent des perspectives pour l'industrie financière et le développement de l'Education financière dans notre pays. / This dissertation draws from a sample of 13 000 clients of an online broker and 1.3M movements of buys and sells from January 2006 to June 2008. The results show that:1/ By regressing the buys and sells to the returns of the domestic index (CAC 40), the french individual investors have a contrarian behavior. This result is in line with the existing literature on "noise traders" and the market liquidity.2/ Through logistic regression of the purchase decision, we show that sophistication (that we proxy with the use of the SRD), is a strong factor explaining the purchase decision.These results can bring insights to the financial industry and help to the development of the financial litteracy.

Background: There are several studies that have found an expectation gap between auditors and different stakeholders. Since 2019, there has been a sharp increase in the number of individual investors in Sweden. There is a lack of studies examining the expectation gap between auditors and individual investors. Purpose: The purpose of the study is to analyze and explain whether Swedish auditors and individual investors have a different view regarding the auditor’s responsibility, reliability, and decision usefulness. Furthermore, the view of individual investors is analyzed with different demographic factors. Research method: This is a quantitative study with a deductive approach, where the hypotheses are developed from prior research. The empirical data comes from the answers from a mail survey and a web survey. The survey consisted of statements regarding the auditor’s responsibility, reliability, and decision usefulness. Results: The study shows that there is an expectation gap between auditors and individual investors in Sweden. The study also shows that experience from the stock market leads to a more narrow expectation gap between auditors and individual investors in Sweden. Contributions: The study contributes to a better understanding of what the expectation gap between auditors and individual investors in Sweden consists of. Additionally, it shows how individual investors in Sweden perceive the auditor’s responsibility, reliability, and decision usefulness / Bakgrund: Det finns många studier som konstaterat ett förväntansgap mellan revisorer och olika intressentgrupper. Sedan 2019 har antalet småsparare i Sverige kraftigt ökat. Det saknas studier som undersöker småspararnas förväntningar på revisorn. Syfte: Syftet med studien är att analysera och förklara huruvida svenska revisorer och småsparare har olika uppfattningar gällande revisorns ansvar, tillförlitlighet och beslutspåverkan. Vidare analyseras även småspararnas uppfattningar utifrån olika demografiska faktorer. Metod: Studien är kvantitativ med en deduktiv ansats, där hypoteserna utvecklats med hjälp av tidigare forskning. Empirin har samlats in genom en mailenkät och en webbenkät som utgörs av påståenden om revisorns ansvar, tillförlitlighet och beslutspåverkan. Resultat: Resultatet visar att det finns ett förväntansgap mellan revisorer och småsparare i Sverige. Vidare visar resultatet att utbildningsnivå inte minskar förväntansgapet, men att mer erfarenhet på börsen leder till ett mindre förväntansgap mellan revisorer och småsparare i Sverige. Kunskapsbidrag: Studien bidrar till ökad förståelse för hur förväntansgapet mellan revisorer och småsparare i Sverige ser ut. Därtill hur revisorer och småsparare i Sverige ser på revisorns ansvar, tillförlitlighet och beslutspåverkan.

Entrepreneurship is often touted as a key avenue for upward mobility. However, it is also a context that highlights the profound impact of underlying privileges, such as family wealth and social capital associated with higher social class origins. This dissertation consists of three empirical essays studying the impact of social class origins on entrepreneurial entry and outcomes. Chapter 1 documents the magnitude of the social class advantage in being an entrepreneur and investigates mechanisms in terms of human, cultural, and entrepreneurial capital. Chapter 2 examines how investors’ interest in a startup varies by the social class origins of the founder and the investor themselves, using a lab-in-the-field experiment on angel and venture capital investors. Chapter 3 studies the venture capital funding gap between founders from privileged backgrounds and others, using large-scale observational data on startup founders "at risk" for venture funding.