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Maxime Merli Awarded the 2013 Best Article Prize by Finance Periodical

Publié le August 20, 2014, Mis à jour le January 13, 2016

On 20th May 2014, the 2013 Prize for the Best Article published in Finance periodical was awarded to Maxime Merli (Large Laboratory, EM Strasbourg) and Tristan Roger (DRM Finance, Paris Dauphine University) for their article entitled «What Drives the Herding Behavior of Individual Investors?».

The Prize for the Best Article published in Finance, the official periodical of the French Finance Association (AFFI), is awarded yearly by a jury composed of finance specialists. This year, the jury was chaired by Patrick Navatte (Rennes 1 University) and comprised of Jocelyn Martel (ESSEC), Christophe Pérignon (HEC) and Philippe Raimbourg (Paris 1) University. Maxime Merli (EM Strasbourg) and Tristan Roger (Paris Dauphine University) earned the prize for their article on «hat Drives the Herding Behavior of Individual Investors?». The prize was officially presented at the Gala Night of AFFI’s spring conference, which was held at the Institute for Enterprise Administration in Aix-en-Provence on 20th May 2014.

The awarded article investigates the herding behaviour of individual investors based on the study of close to 8 million transactions performed by 87,373 individual investors over the period from 1999 to 2006. The authors demonstrate the persistence over time of such a behaviour as well as the prominent role of past portfolio performances. ln addition, they highlight the fact that the most sophisticated investors are less prone to herding behaviour as a result of poor past performances. They finally provide evidence of the impact of herding behaviour on the performance of the portfolios held. More specifically, the portfolios held by investors going against the crowd feature higher profitability rates combined, however, with lower yield/risk couples, and hence lower performances.

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