Investor Sentiment and IPOs Anomalies: An Agent-Based Computational Finance
Gaofeng Zou 1 2, Qiyuan Cheng 1 3, Zhenwei Lv 1 3 * , John Edmunds 4, Xiaopeng Zhai 1
More Detail
1 College of Management and Economics, Tianjin University, Tianjin, 300072, CHINA
2 China Center for Social Computing and Analytics, Tianjin, 300072, CHINA
3 Key Laboratory of Computing and Analytics of Complex Management Systems, Tianjin, 300072, CHINA
4 Babson College, 212 Tomasso Hall, Babson Park, MA 02457, USA
* Corresponding Author

This article belongs to the special issue "Problems of Application Analysis in Knowledge Management and Science-Mathematics-Education".

Abstract

It is worthwhile to investigate abnormal performance of IPOs by incorporating investor sentiment. Using the method of Agent-based Computational Finance (ACF), we analyze the effect from different kinds of investor sentiment on IPOs first-day underpricing and long-term performance. The results show that individual investor’s sentiment is positively correlated with the IPO’s first-day underpricing and its long-run performance. In the long run, along with the rising of individual investor sentiment, IPOs’ long-term performance will change from underperforming to outperforming. This conclusion provides a more reasonable explanation for the different IPOs long-term performance.

License

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Article Type: Research Article

https://doi.org/10.12973/ejmste/77931

EURASIA J Math Sci Tech Ed, 2017 - Volume 13 Issue 12, pp. 7707-7721

Publication date: 16 Nov 2017

Article Views: 694

Article Downloads: 230

Open Access References How to cite this article