Professor Henrik Cronqvist, University of Miami

Financial decisions in today’s society are made in environments that involve color stimuli. In this paper, we perform an empirical analysis of the effects of colour on investment behaviour. First, we find that when investors are displayed potential losses in red, risk taking is reduced. Second, when investors are shown past negative stock price paths in red, expectations about future stock returns are reduced. Consistent with red causing “avoidance behaviour”, red colour reduces investors’ propensity to purchase stocks. The findings are robust to a series of checks involving colorblind investors and alternative colours to control for salience effects. Finally, the effects are muted in a cultural setting, e.g. China, where red is not used to visualise financial losses. A contribution of this study is to introduce hypotheses from colour psychology and visual science to enhance our understanding of the behaviour of individual investors.

Speaker bio

Henrik Cronqvist is Professor of Finance at the University of Miami, where he conducts interdisciplinary research and teaches finance, entrepreneurship, and management. He is also the Chair of the Department of Finance and the Director of PhD programmes in Business and Economics.

Professor Cronqvist received a PhD in Finance from the University of Chicago Booth School of Business, and an MS in Business and Economics from the Stockholm School of Economics. Previously, he served as the Zhongkun Group Chair at China Europe International Business School, China’s top-ranked business school. Prior to that, he was the McMahon Family Chair and George R. Roberts Fellow at the Robert Day School of Economics and Finance at Claremont McKenna College. He started his academic career at the Ohio State University, where he received the “Pace Setters Outstanding Research Award”, the Fisher College of Business annual research award. He is also a Research Affiliate at the Swedish House of Finance and Institute of Financial Research. He has been a Visiting Professor at Yale University and University of California – Irvine.

Professor Cronqvist’s research involves behavioral finance and corporate finance. His work has been published in top journals in economics, including the American Economic Review and the Journal of Political Economy as well as in finance, including the Journal of Finance, the Journal of Financial Economics, and the Review of Financial Studies. He currently serves as an Associate Editor of the Review of Financial Studies. He is often invited to give seminars at academic conferences and to executives and public policy makers around the world. Several of his research papers have been recognised with best paper awards at international conferences, and have been sponsored by competitive research grants. His work has been featured in BusinessWeek, The Economist, Financial Times, The Wall Street Journal, and on CNBC and CNN.

Professor Cronqvist has extensive teaching experience in the US, China, and Europe related to corporate valuation, entrepreneurship, mergers and acquisitions, and private equity, at the MBA, EMBA, and PhD levels. He has developed many business cases, clinical studies, and simulation models, which illustrate complex financial decisions. He is active in executive education and has managed open and in-company programmes in emerging markets, and provides consulting advice to global companies related to corporate finance and managerial decision-making.

Professor Cronqvist’s current research projects involve understanding behaviors and biases of investors and corporate managers. His teaching projects involve “blended learning” in business education and developing a behavioural finance course.

Refreshments

There will be a light lunch served prior to the seminar at 12:45.

Address

Trumpington St
Cambridge
CB2 1AG
United Kingdom

Date & time

Date: 10 October 2017
Start Time: 13:15
End Time: 14:45

Audience

Open to: All

Category:

 

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Event location


Trumpington St
Cambridge
CB2 1AG
United Kingdom

Event timings

Date: 10 October 2017
Start Time: 13:15
End Time: 14:45