Topic: Information cherry-picking: When confirmation bias met anchoring bias

Speaker: Tse-Chun Lin, Area Head of Finance & Professor of Finance, HKU Business School

Time: 10:00am-11:30am, November 6

Location: 4-101

Abstract:

We hypothesize that a surge in the availability of information coupled with investors’ confirmation bias could aggravate retail investors’ behavioral biases. We use the staggered EDGAR implementation to provide causal inference for our hypothesis and find that retail investors’ anchoring tendency is amplified for the treated stocks after the EDGAR implementation. The effect is more evident (i) among stocks with lower reporting readability and higher information uncertainty, (ii) shortly after the release of corporate 10K/Q reports, and (iii) for Internet users and sophisticated investors. The exacerbated anchoring bias in the post-EDGAR period also makes retail investors lose more money.

Speaker Biography:

Professor Tse-Chun LIN received his Bachelor degree in Economics from National Taiwan University and MBA degree from National Chengchi University. He graduated with an M.Phil. in Economics from Tinbergen Institute in 2006. In 2009, he graduated from the Ph.D. program at the University of Amsterdam and joined The University of Hong Kong as Assistant Professor at HKU Business School. He was promoted to Associate Professor with tenure in 2015 and Professor in 2018.

Professor Tse-Chun LIN has been publishing his research in leading academic journals such as American Economic Review, Journal of Financial Economics, Review of Financial Studies, Journal of Accounting and Economics, Management Science, Journal of Financial and Quantitative Analysis, Review of Finance, etc. His research has also been featured in The Economist, WSJ, Bloomberg, and Investopedia, etc.