Taming the bias zoo

Speaker：Xiong Wei (Researcher, Shenzhen Stock Exchange Research Institute)

Host：Liu Jingjun , Associate Professor, Lingnan College

Time and Date：14:30, Jun. 16, 2023

Venue: Lingnan Hall third floor lecture hall(302)

Language: English + Chinese

Abstract:

The success of behavioral economics has led to a new challenge: many biases offer observationally similar predictions for a targeted financial anomaly. To tame this bias zoo, we combine subjective survey responses with observational data to propose a new approach, one that is robust to question-specific biases introduced through surveys. We illustrate this approach by administering a nationwide survey of Chinese retail investors to elicit their trading motives. In cross-sectional regressions of respondents’ actual turnover on survey-based trading motives, perceived information advantage and gambling preference dominate other motives, though they are not the most prevalent biases based on survey responses.