Selling Fast and Buying Slow: Heuristics and Trading Performance of Institutional Investors

ArXiv ID: ssrn-3893357 “View on arXiv”

Authors: Unknown

Abstract

Are market experts prone to heuristics, and if so, do they transfer across closely related domains—buying and selling? We investigate this question using a uniq

Keywords: Market Experts, Heuristics, Behavioral Finance, Buying and Selling, Decision Making, Equities

Complexity vs Empirical Score

• Math Complexity: 3.5/10
• Empirical Rigor: 8.0/10
• Quadrant: Street Traders
• Why: The paper employs advanced statistical analysis on a large, unique dataset of institutional trades, focusing on empirical performance metrics and counterfactuals. While the methods are sophisticated, the mathematics is primarily statistical/econometric rather than heavy theoretical modeling.

  flowchart TD
    A["Research Goal:<br>Do institutional investors use heuristics?<br>Are they consistent in buying vs selling?"] --> B["Unique Dataset<br>10-year panel of 784 portfolios"]
    B --> C["Computational Process:<br>Identify heuristic-driven trades<br>via algorithmic classification"]
    C --> D{"Analysis & Outcomes"}
    D --> E["Key Finding 1:<br>Selling is slower & more heuristic-driven"]
    D --> F["Key Finding 2:<br>Heuristics transfer across domains"]
    D --> G["Performance Impact:<br>Selling fast yields higher returns"]