How value-glamour investors use financial information: UK evidence of investor's confirmation bias

Chau Doung, Gioia Pescetto, Daniel Santamaria

Research output: Contribution to journalArticlepeer-review

25 Citations (Scopus)
109 Downloads (Pure)


The paper investigates investor’s behaviour in the context of value–glamour investing and fundamental analysis, and provides a direct test of the confirmation bias by bringing together the evidence from several strands of literature into a well-defined framework of investor behaviour. The empirical evidence presented is in line with a model of investor’s asymmetric reaction to good and bad news due to confirmation bias. Pessimistic value investors typically under-react to good financial information, but they process bad information rationally or over-confidently. On the contrary, glamour investors are often too optimistic to timely update prices following bad financial information, but they are likely to fairly price or even over-react when receiving good information.
Original languageEnglish
Pages (from-to)524-549
Number of pages25
JournalThe European Journal of Finance
Issue number6
Early online date7 Nov 2012
Publication statusPublished - 2014
Externally publishedYes

Bibliographical note

This is an Accepted Manuscript of an article published by Taylor & Francis in The European Journal of Finance on 07/11/2012, available online:

Copyright © and Moral Rights are retained by the author(s) and/ or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This item cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder(s). The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders.


  • value–glamour investing
  • financial statement analysis
  • contextual fundamental analysis
  • market efficiency
  • behavioural finance
  • confirmation bias


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