Finance research at Oulu Business School focuses on individual and institutional investors’ actions in the financial markets. The research utilizes large empirical datasets covering both individuals’ and institutions’ securities transactions. The research projects include analyzing the rationality of investors’ decision making under standard models of finance, analyzing the reasons for the possible deviations from the standard model’s prediction of behavior, and developing alternative theoretical models to help understand these seemingly irrational behaviors. We also look at how the actions of different investor groups affect price formation in financial markets and overall market uncertainty.
One project involved with the analysis of individual investor behavior is part of a multidisciplinary research project which concentrates on individuals in the famous Northern Finland Birth Cohort 1966. The project is looking at cohort members’ stock transactions, evaluating their attitudes towards return and risk and searching for relationships between the investors’ behavior and their investor profiles, personal characteristics and personality.
Regarding institutional investors, part of our research focuses on hedge funds. Factors, such as transactions costs and market frictions, seem to lead to investment decisions that depart from the standard model’s predictions of behavior. Development of current theoretical models will help explain such behavior. Additionally, an important focus area for the research group is hedge funds’ role in financial crises.
Last updated: 19/7/2016