Stock price impact of diversity in investor beliefs |
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| Authors: | Murugappa Krishnan |
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| Institution: | Radford University, Radford, USA |
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| Abstract: | I re-examine the association between diverse investor beliefs and stock prices within the context of an imperfect competition model. The relationship is ambiguous because of several different effects of a change in diversity in investor beliefs. This has implications for empirical design and explains why 40 years of evidence on this association is inconclusive. |
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| Keywords: | Diverse beliefs returns correlated signals |
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