Availability Bias and Investors' Reaction to Analyst Recommendation

• Main Authors: Lee, Yuan Ju, 李苑如
• Other Authors: 林美珍
• Format: Others
• Language: zh-TW
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/07944231412178735630

碩士 === 國立臺北大學 === 企業管理學系 === 103 === Tversky and Kahneman (1973) proposed that people tend to make decisions based on experiences while facing with uncertainty. It is known as heuristics. People use heuristic to judge frequency and the probability of events. Using the availability heuristic, people would judge the probability of events by the ease in which instances could be brought to mind. Thus, using the availability heuristic, people would judge an event to be more likely to occur if they could think of more examples regarding that event. A high proportion of retail investors in Taiwan may influence the stock market more than other countries. In our research, we employed the analyst recommended rating changes as a company event, and refer abnormal return and abnormal trading volume indicators of investors' reaction. Furthermore, according to Kliger and Kudryavtsev(2010), we divided the availability bias into two aspects: outcome availability and risk availability. Our results show that investors in Taiwan have neither outcome availability nor risk availability. The company's characteristics also have significant effects on abnormal returns. Overall, our results are similar to those of Akhtar, Faff, Oliver, and Subrahmanyam(2012), namely that negative information has more significant effect on stock than positive information.