Presidential Address Trashing the Polls

Black, Joan S.

doi:10.1093/poq/55.3.474

Cited by 2 publications

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“…This paper has provided evidence that, together, suggest that head-and-shoulders trading qualifies as imperfectly rational noise trading, consistent with the description of noise traders provided in Black (1986): "People sometimes trade on noise as if it were information. If they expect to make profits from noise trading, they are incorrect".…”

Section: Head-and-shoulders and Noise Tradingsupporting

confidence: 76%

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Noise Trading and Illusory Correlations in US Equity Markets*

2012

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Abstract. This paper provides evidence that "illusory correlations," a well-documented source of cognitive bias, leads some agents to be imperfectly rational noise traders. We identify illusory correlations by focusing on the head-and-shoulders chart pattern. Though this is considered one of the most reliable technical trading signals, our evidence indicates that the signal does not profitably predict directional movements as claimed. We connect this illusory correlation to noise trading by showing that the pattern is associated with a significant rise in trading volume and a substantial reduction in bid-ask spreads.JEL Classification: G12, G14

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Section: Head-and-shoulders and Noise Tradingsupporting

confidence: 76%

“…Black (1986), for example, claims that "People who trade on noise are willing to trade even though from an objective point of view they would be better off not trading. Perhaps they think the noise they are trading on is information.…”

Section: Introductionmentioning

confidence: 99%

Noise Trading and Illusory Correlations in US Equity Markets*

2012

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Presidential Address. Far From Ordinary Questions: Task Difficulty, Motivation, and Measurement Practice

Schaeffer¹

2020

Public Opinion Quarterly

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As Howard Schuman noted in his presidential address in 1986, survey respondents expect to be asked “ordinary questions,” but our questions often make extraordinary demands. The impact of the difficult tasks we give to respondents on their motivation to provide complete and accurate information is an aspect of the infrastructure of measurement in surveys that has received little attention. When questions are particularly difficult for some groups in a target population, the comparability of measurement for all units in a population is reduced. For measurement to be comparable across all groups in a population, questions must be equally accessible—and equally motivating—to all. Some challenges to improving the practice of measurement in surveys arise because—under the constraints of limited time, budget, and staff—we borrow questions, give them authority based on their source, assert that we need to replicate them to make comparisons, and fail to fully examine claims that they have been validated. Although the constraints are real, these practices limit our ability to take full advantage of advances in research about instrument design to improve the quality of measurement in surveys.

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Presidential Address Trashing the Polls

Cited by 2 publications

References 0 publications

Noise Trading and Illusory Correlations in US Equity Markets*

Noise Trading and Illusory Correlations in US Equity Markets*

Presidential Address. Far From Ordinary Questions: Task Difficulty, Motivation, and Measurement Practice

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