Investor Memory and Biased Beliefs: Evidence from the Field*

• 成果类型: Article
• 署名作者: Jiang, Zhengyang; Liu, Hongqi; Peng, Cameron; Yan, Hongjun
• 署名单位: Northwestern University; National Bureau of Economic Research; The Chinese University of Hong Kong, Shenzhen; The Chinese University of Hong Kong, Shenzhen; University of London; London School Economics & Political Science; Centre for Economic Policy Research - UK; DePaul University
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1093/qje/qjaf035
• 发表日期: 2025
• 页码: 2749-2804
• 关键词: Overconfidence; expectations

摘要

We survey a large, representative sample of retail investors in China to elicit their memories of stock market investments and their return expectations. We merge these survey data with administrative transaction data to test a model in which investors selectively recall past experiences to form their beliefs. Our analysis uncovers new facts about investor memory and highlights similarity-based recall as a key mechanism of belief formation in financial markets. A rising market prompts investors to recall their past experiences more positively, leading to more optimistic forecasts of future returns. Recalled experiences can explain cross-investor variation in return expectations and, in our setting, dominate actual experiences in their explanatory power. In the transaction data, we confirm that recalled experiences are reflected in investors' trading decisions through a belief channel.