СКЛОННОСТТА КЪМ ОПТИМИЗЪМ И НЕЙНОТО ПРОЯВЛЕНИЕ НА ФИНАНСОВИТЕ ПАЗАРИ
OPTIMISM BIAS: INFLUENCE ON THE FINANCIAL MARKET

Summary/Abstract: Many academic studies have been conducted in the field of optimism bias and its influence on human’s decision making. However this area of research in the CEE countries and emerging European capital markets is nearly unknown. This research about the emerging stock market in Bulgaria proves that optimism bias influenced Bulgarian investors decision making during the period of IPO hot market (2006 – 2007) on the Bulgarian Stock Exchange. As a result, the return of the selected IPOs underperforms the stock exchange benchmark index BG40 with 8 to 20 percentage points for the 5Y post-IPO period. At the same time, IPO stocks have higher volatility than the benchmark.The author argues that results can be explained by the higher amplitude of optimism bias of Bulgarian investors.

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