What is ‘False Market’
A market where prices are manipulated and impacted by erroneous information, preventing the efficient negotiation of prices. These types of markets will often be marred by volatile swings because the true value of the market is clouded by the misinformation.
Explaining ‘False Market’
When investors use inaccurate information to guide their decisions, they tend be irrational and over- or underreact to news. The illogical decisions made by these investors skew the market, causing the true value of a security to be misrepresented
Further Reading
- Banks and the false dichotomy in the comparative political economy of finance – heinonline.org [PDF]
- False (and missed) discoveries in financial economics – onlinelibrary.wiley.com [PDF]
- Investor optimism, false hopes and the January effect – www.tandfonline.com [PDF]
- Mental accounting and false reference points in real estate investment decision making – www.tandfonline.com [PDF]
- False promises? A sociological critique of the behavioural turn in law and economics – link.springer.com [PDF]
- Detecting false financial statements using published data: some evidence from Greece – www.emerald.com [PDF]
- Do false financial statements distort peer firms' decisions? – meridian.allenpress.com [PDF]
- The HIPC initiative: true and false promises – onlinelibrary.wiley.com [PDF]
- Speculative leverage: a false cure for pension woes – www.tandfonline.com [PDF]
- Repurchase announcements, lies and false signals – link.springer.com [PDF]
