Investor Sentiments
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Author(s)
Izmalkov, Sergei
Yildiz, Muhamet
Date Issued
February 2010
Journal
American Economic Journal: Microeconomics
Publisher
American Economic Association
Citation
Izmalkov, Sergei, and Muhamet Yildiz. 2010. "Investor Sentiments." American Economic Journal: Microeconomics, 2(1): 21–38.
DOI:10.1257/mic.2.1.21
Version
Author's final manuscript
Abstract
We consider a general class of games that have been used to model many economic problems where players' sentiments are believed to play an important role. Dropping the common prior assumption, we identify the relevant notion of sentiments for strategic behavior in these games. This notion is tied to how likely a player thinks that some other player has a more optimistic outlook than himself when they obtain their private information. Under this notion, we show that sentiments have a profound effect on strategic outcomes -- even with vanishing uncertainty.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
http://dx.doi.org/10.1257/mic.2.1.21
