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Presentation of the Agreement of joint PhD supervision between the IMT School and the University of Alicante

8 June 2018
San Francesco - Via della Quarquonia 1 (Classroom 1 )
IMT School and University of Alicante faculty members will present the agreement of joint PhD supervision between the two universities. The IMT School Director, Prof. Pietro Pietrini, will give the opening remarks. Next, Prof. Carmin Bevia, Professor of Economics at the University of Alicante, will present the main lines of research to be carried out within the framework of the agreement and will illustrate the UA campus and the Department of Economics, including the its laboratory for experimental economics. This general introduction will be followed by two talks given by two UA faculty members: Prof. Adam Sanjurjo Title: A Visible (Hot) Hand? Expert Players Bet on the Hot Hand and Win (with Joshua B. Miller) Abstract:Belief in the hot hand -- positive momentum in performance -- has often been quickly dismissed as fallacious since the canonical, and highly influential, hot hand fallacy paper was written over 30 years ago. For better or worse, subsequent research has often focused on hot hand performance rather than beliefs. It is perhaps due to these reasons that there exists no direct evidence that it can be beneficial to hold hot hand beliefs. We provide the first evidence that people -- here experienced practitioners -- can profitably exploit their hot hand beliefs. Further, the data that yields these results is from the field betting task of the canonical hot hand fallacy study. We illustrate how the original authors' analysis led them to the opposite conclusion due to underpowered tests and misinterpreted effect sizes. Prof. Inigo Iturbe-Ormaetxe Title: Cognitive dissonance, investor beliefs and the Disposition Effect Abstract: The disposition effect (DE) refers to the tendency of investors to sell assets whose price has increased too soon, while keeping assets that have dropped in value too long. We study if one of the possible causes of this bias is that investors have distorted beliefs about the assets they own. To this end, we elicit price expectations on the future performance of assets in a stylized market. In one treatment, we assign a portfolio of assets to each participant, while in a second treatment subjects must choose the assets. We find that, in both treatments, subjects are more optimistic about assets that they own than about other assets. Moreover, this effect is much stronger in the treatment in which they choose assets. Here, subjects remain stubbornly optimistic even after poor performance of their chosen assets.