Algorithm Aversion, Appreciation, and Investor Return Beliefs (with Francesco Stradi)
The average investor discounts a return forecast once told it was produced by an AI, because they find it less credible. Sophisticated investors and those with higher AI literacy react the other way, trusting the algorithm more than the human.
Selected conferences: Sydney Banking and Financial Stability, 29th Annual New Zealand Colloquium, and Marketing-Finance Symposium (Maastricht University)
News coverage: 95bFM, The Conversation, Financial Times, InvestmentWeek, Radio New Zealand, Trends, ING, and Yahoo News
Video coverage: Ausbiz and TVNZ (Breakfast)
Revisions requested for the British Accounting Review (2nd round)
Climate Extrapolation and Relative Asset Pricing: Evidence from Bordeaux Premier Cru Wine Auctions
Buyers project the local climate risks in the news around them onto assets produced elsewhere. Salient local coverage, not information about the assets, drives the gap. This is the availability heuristic at work in a global auction market.
Selected conferences: AWBR (Adelaide), Burgundy School of Business, Deakin University, ESE Business School, and RMIT
News coverage: RNZ
Revisions requested for the Journal of Corporate Finance (2nd round)
Aspirations, Investment Horizon, and Skewness Demand: Evidence from the 1905 Dutch Lottery Ban (with Amaury de Vicq)
Investors want positively skewed payoffs more as their horizon shortens, but only if they are below the wealth level they aspire to. The 1905 Dutch lottery ban confirms this: less wealthy investors moved into lottery bonds, and moved more the older they were.
Selected conferences: Boulder Summer Conference on Financial Decision-Making, EHA Annual Meeting (Philadelphia), and WEIA (San Francisco)
Price-based categorization and comovement: Evidence from post-hyperinflation Germany (with Lyndon Moore)
Do Stock Market Reforms Help Firms Exploit Growth Opportunities? (with Stefano Battilossi and Dario Pellegrino)
Comovement (with Amaury De Vicq)
Sales Without Information: Price Discovery When Assets Trade at Auction (with Alejandro Bernales)