Adam Smith Business School

Associate Professor Constantios Antoniou , University of Warwick

"Subjectively Salient: Contrast Effects in Investor Responses to Stock Returns"
Wednesday 29 January. 15:00-16:30
Room 282 (Hot House) ASBS 

Abstract

Stock returns over fixed time intervals such as daily returns are typically presumed to be objective metrics for all investors. We show that, when a particular daily stock return is subjectively salient standing out in relation to investors’ previous personal experiences with daily returns from the stocks in their own portfolio, they are much more responsive to it, especially if they are more likely to remember their previous return experiences more vividly. The effect is robust and economically large, as the sensitivity of investors’ responses to stock returns increases by almost a factor of two when returns are subjectively salient. These findings suggest that contrast effects create subjectivity in the perception of stock returns, leading to considerable variability in trading decisions.

 

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3777778

Bio

I am an associate professor of finance and behavioural science at Warwick Business School. I am primarily interested in behavioural finance, studying issues related to the processing of information and the formation of expectations in the context of portfolio choice, corporate decisions and empirical asset pricing.

---

For further information, please contact business-school-research@glasgow.ac.uk

We foster a positive and productive environment for seminars through our Code of conduct.

First published: 22 January 2025