Prospect Theory and Stock Returns: An Empirical Test (Digest Summary): N. Barberis, A. Mukherjee & B. Wang: Review of Financial Studies, Vol. 29 (November 2016), 3068-3107

Research output: Contribution to specialist publicationBook/Film/Article review


Investors who use prospect theory to evaluate stocks according to their historical return distributions may excessively bid up stocks with high historical mean returns, low volatilities, and positive skewness. The authors find a negative relationship between stocks’ prospect theory values and their future returns in the cross section.
Original languageEnglish
Specialist publicationCFA Digest
PublisherCFA Institute
Publication statusPublished - May 2017

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