Construct · 1 fields · 1 citations

underreaction: a standalone construct

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Behavioral finance

prices adjusting too slowly to new information because it spreads gradually among investors, producing short-run momentum.

In behavioral finance, underreaction refers to prices adjusting too slowly to new information because it spreads gradually among investors, producing short-run momentum. This meaning comes from Hong (1999) in The Journal of Finance.[1]

Unit
Recovery means
Measured by

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Nearby constructs

Barberis-Shleifer-Vishny model1 fields · 1 citationsanchor · a standalone construct information uncertainty hypothesis1 fields · 1 citationsanchor · a standalone construct information4 fields · 5 citationsjingle · one word, four constructs

References

Hong, H., & Stein, J. C. (1999). A Unified Theory of Underreaction, Momentum Trading, and Overreaction in Asset Markets. The Journal of Finance, 54(6), 2143-2184. https://doi.org/10.1111/0022-1082.00184

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