Do culture, sentiment, and cognitive dissonance explain the ‘above suspicion’ anomalies?

Ali Altanlar, Jiaqi Guo, Phil Holmes

Research output: Contribution to journalArticlepeer-review

20 Citations (Scopus)


We investigate how cognitive dissonance arising from interactions between sentiment and culture affects momentum and post-earnings-announcement-drift (PEAD). We focus on differing views relating to change between western and East Asian cultures. Building on Hong and Stein's heterogeneous trader model and recognizing westerners’ (easterners’) belief in continuation (reversal), we propose cognitive dissonance arises in different circumstances and to differing degrees in the two cultures, resulting in it being a key driver of the anomalies. Results support our hypotheses, suggesting sentiment and culture interact to impact cognitive dissonance, explaining differences in the anomalies across countries evident in prior literature.

Original languageEnglish
Pages (from-to)1168-1195
Number of pages28
JournalEuropean Financial Management
Issue number5
Early online date10 Oct 2018
Publication statusPublished - Nov 2019


  • cognitive dissonance
  • culture
  • investor sentiment
  • momentum
  • post-earnings-announcement-drift

ASJC Scopus subject areas

  • Accounting
  • Economics, Econometrics and Finance(all)


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