Conditioned Responses towards Measures Relating to the Capital Cost of Short Sellers: Evidence from Taiwan

Chih-Hsiang Chang () and Wen-Shan Chiang ()
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Chih-Hsiang Chang: National University of Kaohsiung, Kaohsiung, Taiwan
Wen-Shan Chiang: National University of Kaohsiung, Kaohsiung, Taiwan

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2014, vol. 17, issue 03, 1-27

Abstract: This study draws on classical conditioning to explain how investors react to short sale-related measures. Our results reveal that measures related to the capital cost of short sellers cause a conditioned response among investors. This explains how investors actually perceive and relate to short sale-related measures and shows that many measures fail to achieve the expected results. Additionally, the conditioned response to measures related to the capital cost of short sellers reveals investor sentiment about the adjustment of short sale margin requirements.

Keywords: Short sales; conditioned responses; investor sentiment; behavioral finance; psychological pitfalls (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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DOI: 10.1142/S0219091514500192

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