CEO overconfidence, lottery preference and the cross-section of stock returns

Jing Lu, Keng Yu Ho, Po Hsin Ho, Kuan Cheng Ko

研究成果: 雜誌貢獻期刊論文同行評審

摘要

Unlike existing studies that mostly focus on investors’ biased behavior in explaining the lottery-related anomaly, our study highlights the importance of CEO overconfidence for the anomaly. We propose that CEO overconfidence could enhance investors’ confidence in the stock's price even if the stock exhibits lottery-like payoffs. As a result, lottery stocks with overconfident CEOs are less prone to subsequent underperformance. Based on portfolio-based analyses and cross-sectional regressions, we provide robust evidence to confirm this hypothesis. Our study has important implications to the literature on both lottery-related anomaly and CEO overconfidence.

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文章編號103749
期刊Finance Research Letters
54
DOIs
出版狀態已出版 - 6月 2023

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