| Abstract: | Shareholders of a Regional Bell Operating Company (RBOC) tendto live in the area which it serves, and an RBOC's customerstend to hold its shares rather than other RBOCs' equity. Thegeographic bias of the RBOC investors is closely related tothe general tendency of households' portfolios to be concentrated,of employees' tendency to own their employers' stocks in theirretirement accounts, and to the home country bias in the internationalarena. Together, these phenomena provide compeling evidencethat people invest in the familiar while often ignoring theprinciples of portfolio theory. |
