TY  - JOUR
AU  - Zeckhauser,Richard
AU  - Patel,Jayendu
AU  - Hendricks,Darryll
TI  - Nonrational Actors and Financial Market Behavior
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3731
PY  - 1991
Y2  - June 1991
UR  - http://www.nber.org/papers/w3731
L1  - http://www.nber.org/papers/w3731.pdf
N1  - Author contact info:
Richard J. Zeckhauser
John F. Kennedy School of Government
Harvard University
79 John F. Kennedy Street
Cambridge, MA  02138
Tel: 617/495-1174
Fax: 617/384-9340
E-Mail: richard_zeckhauser@harvard.edu

Jayendu Patel
Harvard University
E-Mail: jayendupatel@gmail.com

Darryll Hendricks
Federal Reserve Bank of New York
E-Mail: no email available
AB  - The insights of descriptive decision theorists and psychologists, we believe, have much to contribute to our understanding of financial market macrophenomena. We propose an analytic agenda that distinguishes those individual idiosyncrasies that prove consequential at the macro-level from those that are neutralized by market processes such as poaching. We discuss five behavioral traits - barn-door closing, expert/reliance effects, status quo bias, framing, and herding - that we employ in explaining financial flows. Patterns in flows to mutual funds, to new equities, across national boundaries, as well as movements in debt-equity ratios are shown to be consistent with deviations from rationality.
ER  -