IDEAS home Printed from https://ideas.repec.org/p/biu/wpaper/2011-05.html
   My bibliography  Save this paper

To What Extent do Investors in a Financial Market Anchor Their Judgments? Evidence from the Hong Kong Horserace Betting Market

Author

Listed:
  • Johnnie E.V. Johnson

    (University of Southhampton)

  • Shuang Liu
  • Adi Schnytzer

    (Bar-Ilan University)

Abstract

This paper explores the use of the anchoring and adjustment heuristic by decision makers in a financial market; in particular, the degree to which horserace bettors anchor their probability judgments on the advantage afforded by a horse‟s barrier-position. The results suggest that under certain conditions bettors anchor on barrier-position information revealed at previous race meetings, but not on the most recent race outcomes. In fact, bettors appear to use the most recent race outcomes appropriately when forming probability estimates; but only when the results are in line with their mental model of barrier-position advantage. Bettors with varying levels of expertise are shown to be subject to anchoring, although greater expertise is generally associated with less anchoring. The paper concludes that the manner and degree of anchoring in real world environ.

Suggested Citation

  • Johnnie E.V. Johnson & Shuang Liu & Adi Schnytzer, 2011. "To What Extent do Investors in a Financial Market Anchor Their Judgments? Evidence from the Hong Kong Horserace Betting Market," Working Papers 2011-05, Bar-Ilan University, Department of Economics.
    • Handle: RePEc:biu:wpaper:2011-05
    as

    Download full text from publisher

    File URL: https://www2.biu.ac.il/soc/ec/wp/2011-05.pdf
    File Function: Working paper
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:biu:wpaper:2011-05. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Department of Economics (email available below). General contact details of provider: https://edirc.repec.org/data/debaril.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.