Advances in Economics, Management and Political Sciences
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Proceedings of the 2022 International Conference on Financial Technology and Business Analysis (ICFTBA 2022), Part 2
Series Vol. 6 , 27 April 2023
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Simple Review of Extrapolation Bias
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Abstract
Extrapolation bias is a popular topic recently in economics and finance. Many researchers have become interested in this bias because it can explain many anomalies that a rational model cannot. This paper is a simple review of extrapolation bias, including its definition and bias. After reviewing past research on extrapolation, this paper selects a comprehensible definition, and three applications that can represent the recent research on extrapolation: the investor behavior model, the bubble model, and the house price model from three different top papers. After the review, it can be concluded that extrapolation bias has a wide applied range especially, in the financial market and asset pricing, and can explain many financial anomalies.
Keywords
behavior economy, behavior finance, extrapolation
References
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 2022 International Conference on Financial Technology and Business Analysis (ICFTBA 2022), Part 2
- ISBN (Print)
- 978-1-915371-23-2
- ISBN (Online)
- 978-1-915371-24-9
- Published Date
- 27 April 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/6/20220153
- Copyright
- 27 April 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited