Pragmatics and the Marketplace: How Gricean Implicature Affects Investor Decision-Making
P. J. Forsberg. Princeton University
It is possible to build a theory of how Gricean Implicature has an impact on investor
decision-making.
Overactive security markets are known to violate the rational model of
stock valuation known as “price equals value.”
At present, two hypotheses exist as
explanations for the overactivity: overconfidence and overreaction.
But there is
support for a new hypothesis – that investors, when provided with information about the
marketplace, make the often-erroneous assumption that such information is precise,
relevant and requires action.
This new hypothesis
can have implications for future experiments in psychology, as well as for public
policy.
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