Do professional investors behave differently than amateurs after the weekend?

This paper compares the trading patterns of amateurs to that of professional investors during the days following the weekend. The comparison is based on all the daily transactions of a sample of both amateurs and professionally managed investors in a major brokerage house in Israel between 1994-1998. We find that weekends influence both amateurs and professional investors, however they affect professionals and amateurs in opposite directions. The results are consistent with previous hypotheses about the effects of the weekend on individuals and institutions in the US and with the way these differences may explain the weekend effect in returns in the US and in other markets. The results are also consistent with the absence of a weekend effect in returns in Israel during the period examined, since the conflicting effects of the weekend on individuals and professionally managed investors may have canceled each other. --

Do professional investors behave differently than amateurs after the weekend?

This paper compares the trading patterns of amateurs to that of professional investors during the days following the weekend. The comparison is based on all the daily transactions of a sample of both amateurs and professionally managed investors in a major brokerage house in Israel between 1994-1998. We find that weekends influence both amateurs and professional investors, however they affect professionals and amateurs in opposite directions. The results are consistent with previous hypotheses about the effects of the weekend on individuals and institutions in the US and with the way these differences may explain the weekend effect in returns in the US and in other markets. The results are also consistent with the absence of a weekend effect in returns in Israel during the period examined, since the conflicting effects of the weekend on individuals and professionally managed investors may have canceled each other

Attention Allocation and Managerial Decision Making

One of the major problems of managerial behavior is the setting of priorities. Time is a scarce resource and managers have to find ways to deal with the multiple tasks that face them. This paper addresses the issue of priority-setting among tasks by managers by proposing analogies from job-shop scheduling theory. We develop a model that views managers employing a combination of rationality and affective judgments with a limited processing capacity.Information Systems Working Papers Serie

What Drives Home Bias? Evidence from Fund Managers' Views

A survey of fund managers reveals home bias for these sophisticated investors in an unrestricted setting. Proximity, perceived informational advantage and higher expected returns are confirmed as accompanying factors. In addition, the home bias of equity managers is also related to institutional, informational and behavioral characteristics. The perceived informational advantage does not seem to be valid. Multivariate analyses indicate that home bias is mainly related to relative return optimism, non-fundamental information and peculiar behavior towards risk. We interpret these as characteristics of less than fully rational behavior. It is consistently found that this pattern does not apply to bond managers.Eine Befragung von Fondsmanagern offenbart die Heimatverzerrung (sog. Home Bias) dieser erfahrenen Investoren in unbegrenzten Rahmenbedingungen. Nähe, empfundene Informationsvorteile und höhere erwartete Renditen werden als Begleitumstände bestätigt. Zusätzlich ist der Home Bias von Aktienfondsmanagern mit institutionellen und informatorischen Gegebenheiten sowie mit bestimmten Verhaltensmustern verbunden. Der empfundene Informationsvorteil scheint sich jedoch nicht zu bewahrheiten. Multivariate Analysen zeigen, dass der Home Bias hauptsächlich mit relativem Renditeoptimismus, der Nutzung nicht-fundamentaler Informationen und besonderem Risikoverhalten verbunden ist. Wir interpretieren diese Eigenschaften als unvollkommen rationales Verhalten. Konsistent zeigt sich, dass dieses Muster nicht für Rentenfondsmanager gilt

Performance Sampling and Bimodal Duration Dependence

Performance sampling models of duration dependence in employee turnover and firm exit predict that hazard rates will initially be low, gradually rise to a maximum, and then fall. Some empirical duration distributions have bimodal hazard rates, however. In this paper, we present a generalization of the performance sampling model that can account for such deviations from unimodality. While the standard model of performance sampling assumes that the mean and the standard deviation of performance are constant over time, we allow them to change in time, to reflect the fact that tasks may change over time. We derive the hazard rate implied by this more general model and show that it can be bimodal. Using data on turnover in law firms, we show that the hazard rate predicted by these models fit data better than existing models

Managerial Allocation of Time and Effort: The Effects of Interruptions

Time is one of the more salient constraints on managerial behavior. This constraint may be very taxing in high-velocity environments where managers have to attend to many tasks simultaneously. Earlier work by Radner (1976) proposed models based on notions of the thermostat or "putting out fires" to guide managerial time and effort allocation among tasks. We link these ideas to the issue of the level of complexity of the tasks to be attended to while alluding to the sequential versus parallel modes of processing. We develop a stochastic model to analyze the behavior of a manager who has to attend to a few short-term processes while attempting to devote as much time as possible to the pursuit of a long-term project. A major aspect of this problem is how the manager deals with interruptions. Different rules of attention allocation are proposed, and their implications to managerial behavior are discussed.Attention, Decision Rules, Priority Setting, Satisficing, Thermostat, Controlled Markov Process