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Heterogeneity and anchoring in financial markets

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  • Yoshiyuki Nakazono

Abstract

The motivation behind this article is to verify the efficient market hypothesis as found in traditional financial theories. Participants in Japanese stock markets tend to be heterogeneous; the types of firms to which survey respondents belong can affect the formation of expectations. Furthermore, the majority of market participants -- even institutional investors who are financial market professionals -- place significant weight on past forecast values, and the strength of the anchoring effects depends on the types of firms to which the respondents belong, as well as the stock market conditions.

Suggested Citation

  • Yoshiyuki Nakazono, 2012. "Heterogeneity and anchoring in financial markets," Applied Financial Economics, Taylor & Francis Journals, vol. 22(21), pages 1821-1826, November.
    • Handle: RePEc:taf:apfiec:v:22:y:2012:i:21:p:1821-1826
    DOI: 10.1080/09603107.2012.681025
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    References listed on IDEAS

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    Cited by:

    1. Fujiwara, Ippei & Ichiue, Hibiki & Nakazono, Yoshiyuki & Shigemi, Yosuke, 2013. "Financial markets forecasts revisited: Are they rational, stubborn or jumpy?," Economics Letters, Elsevier, vol. 118(3), pages 526-530.
    2. Annarita Colasante & Simone Alfarano & Eva Camacho-Cuena & Mauro Gallegati, 2020. "Long-run expectations in a learning-to-forecast experiment: a simulation approach," Journal of Evolutionary Economics, Springer, vol. 30(1), pages 75-116, January.
    3. Tzu-Pu CHANG, Ray Yeutien CHOU & Ray Yeutien CHOU, 2018. "Anchoring Effect on Macroeconomic Forecasts : A Heterogeneity Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 134-147, December.
    4. Nakazono, Yoshiyuki, 2013. "Strategic behavior of Federal Open Market Committee board members: Evidence from members’ forecasts," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 62-70.
    5. Keith Anderson & Tomasz Zastawniak, 2017. "Glamour, value and anchoring on the changing /," The European Journal of Finance, Taylor & Francis Journals, vol. 23(5), pages 375-406, April.

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