Dotcom Effect
95 firms adopted dotcom in their names in 1998 - 1999
abnormal returns earned arount the announcement date by firms changing their names to dotcom
Froot/Dabora 1999
Merger of Royal Dutch and Sehll 1907
Deal
Question
Ausgang
Earnings are shared 60/40
seperated stocks in NL and UK
relation between the stock prices?
Royal Dutch 35% overvalued and 15% undervalued tamporarily
Neoclassical finance vs Bahivoral finance
NF
normative decision theory:
how should individuals make decisions?
agents act fully rational (=> homo oeconomicus)
BF
descriptive decision theory
how people actually arrive at their decisions?
BF ist eine Erweiterung of neoclassical und soll es nicht ersetzen
Zitat von Meir Statman
People in standard finance are rational
People in behavioral finance are normal
behavioral finance based on normative decision
behavioral finance: agents act fully rational
—> homo oeconomicus
Nobelprize
Kahneman & Tversky 2002
prospect theory
help describing real world behavior
findings
people apply heuristics when they evaluate decision problems
decision making is not all about reasoning
people exhibit behavioral biases!!
Fama, Hansen, Shiller 2013
empirical analysis of asset prices
impossible to predict security prices over next few days
not impossible to forecast broad course of security prices over longer horizons
Richard Thaler 2017
Mastermind of libertarian paternalism (nudging)
Research on choice architecture triggered by findings on cognitive biases
Last changed6 months ago