Johan Walden

Haas School of Business
University of California at Berkeley
545 Student services building, #1900
Berkeley, CA 94720
Tel: 510-643-0547

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org

NBER Working Papers and Publications

February 2018Social Transmission Bias and Investor Behavior
with Bing Han, David Hirshleifer: w24281
We offer a new social approach to investment decision-making and asset prices. In our model, senders' propensity to discuss their strategies' returns, and receivers' propensity to be converted, are increasing in sender return. A distinctive implication is that the rate of conversion of investors to active investing is convex in sender return. Unconditionally, active strategies (high variance, skewness, and personal involvement) dominate the population unless the return penalty to active investing is too large. Thus, the model can explain overvaluation of `active' asset characteristics even when investors have no inherent preference over them. It also has strong predictions for how adoption of active strategies depends on features of the investor social network. In contrast with nonsocial a...
January 2010Limited Capital Market Participation and Human Capital Risk
with Jonathan Berk: w15709
The non-tradability of human capital is often cited for the failure of traditional asset pricing theory to explain agents' portfolio holdings. In this paper we argue that the opposite might be true --- traditional models might not be able to explain agent portfolio holdings because they do not explicitly account for the fact that human capital does trade (in the form of labor contracts). We derive wages endogenously as part of a dynamic equilibrium in a production economy. Risk is shared in labor markets because firms write bilateral labor contracts that insure workers, allowing agents to achieve a Pareto optimal allocation even when the span of asset markets is restricted to just stocks and bonds. Capital markets facilitate this risk sharing because it is there that firms offload t...

Published: Jonathan B. Berk & Johan Walden, 2013. "Limited Capital Market Participation and Human Capital Risk," Review of Asset Pricing Studies, vol 3(1), pages 1-37.

NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us