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The Role of Misbehavior in Efficient Financial Markets: Implications for Financial Decision Support

  • Conference paper
Enterprise Applications and Services in the Finance Industry (FinanceCom 2012)

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 135))

Abstract

The analysis of different data sources to support financial decision making has been a subject of research for several decades. While early approaches mostly focus on structured data, recent studies also take into account unstructured data. In this paper, we build upon these two research streams and explore potential benefits that can be achieved by combining both approaches. Therefore, we present an approach that integrates both data types. From a theoretical perspective, our research angle is based on two fundamental theories in Finance: while the Efficient Market Hypothesis states that capital markets are information efficient, Behavioral Finance theory stresses that market efficiency may be limited, e.g. due to irrational behavior of market participants or market barriers. While the two theories provide arguments for and against the functioning of our approach, we can illustrate its superiority compared to other approaches. The implications are discussed from a methodological and theoretical perspective.

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Author information

Authors and Affiliations

  1. Goethe University Frankfurt, Grüneburgplatz 1, 60323, Frankfurt, Germany

    Michael Siering

  2. University of Göttingen, Platz der Göttinger Sieben 5, 37073, Göttingen, Germany

    Jan Muntermann

Authors
  1. Michael Siering
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  2. Jan Muntermann
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Editor information

Editors and Affiliations

  1. Computer Science and Engineering, University of New South Wales, Sydney, NSW, Australia

    Fethi A. Rabhi

  2. Goethe-University Frankfurt, Frankfurt am Main, Germany

    Peter Gomber

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Siering, M., Muntermann, J. (2013). The Role of Misbehavior in Efficient Financial Markets: Implications for Financial Decision Support. In: Rabhi, F.A., Gomber, P. (eds) Enterprise Applications and Services in the Finance Industry. FinanceCom 2012. Lecture Notes in Business Information Processing, vol 135. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-36219-4_3

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  • DOI: https://doi.org/10.1007/978-3-642-36219-4_3

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-36218-7

  • Online ISBN: 978-3-642-36219-4

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