We investigate biases in expectations across different settings through a large-scale
randomized experiment where participants forecast stable stochastic processes. The …

Financial decisions are among the most important life-shaping decisions that people make.
We review facts about financial decisions and what cognitive and neural processes …

We study a newly designed survey administered to a large panel of wealthy retail investors.
The survey elicits beliefs that are important for macroeconomics and finance, and matches …

We propose a new modeling approach for the cross section of returns. Our method,
Instrumented Principal Component Analysis (IPCA), allows for latent factors and time …

Personal experiences of economic outcomes, from global financial crises to individual-level
job losses, can shape individual beliefs, risk attitudes, and choices for years to come. A …

We present a model of credit cycles arising from diagnostic expectations—a belief formation
mechanism based on Kahneman and Tversky's representativeness heuristic. Diagnostic …

ABSTRACT We revisit La Porta's finding that returns on stocks with the most optimistic
analyst long‐term earnings growth forecasts are lower than those on stocks with the most …

Macro-finance addresses the link between asset prices and economic fluctuations. Many
models reflect the same rough idea: the market's ability to bear risk is greater in good times …

It surprised investors, who dumped stocks and brought the market index down by 500 points
on Monday. It surprised policymakers, who rushed to rescue other financial institutions after …

Behavioral finance tries to make sense of financial data using models that are based on
psychologically accurate assumptions about people's beliefs, preferences, and cognitive …