Research Design Connections: Sunshine and Risk Taking
Sun and colleagues link experiencing sunlight and taking more risks. More specifically they report that “We examine sunshine-induced mood and its impacts on investors’ bidding decisions in the primary market where seasoned equities are offered. . . . . We find that investors exposed to stronger sunshine intensity or longer sunshine duration submit a higher bid price for SEOs [seasoned equity offerings], thus leading to lower offer discounts. We also find that mood misattribution and risk-taking act as channels to rationalize such a sunshine effect. Our moderating analyses indicate that the documented impact strengthens in the case of greater uncertainty, less-frequent bidders, retail investors, and lower levels of investment. These sunshine effects impact failed bids, SEO participation and SEOs’ long-term performance. Our study provides original evidence that investors in the primary market can be influenced by a sunshine-induced mood, which, in turn, determines the cost of equity financing.” Qian Sun, …
Log in to Continue Reading
