Can social interaction explain the disposition effect? This study explores this question through the lens of the Self-enhancing Transmission Bias (SET) framework, developing a theoretical model to examine how social interactions influence investor behavior. Our findings reveal that bias transmission through social interactions drives investors to adopt strategies that exhibit a stronger disposition effect. This impact is heterogeneous, significantly amplifying during bear markets and when investor sentiment is not extreme. Using a large dataset of transaction records from Chinese individual investors, our empirical analysis provides strong support for these theoretical predictions. In addition, high levels of social interaction intensity deteriorate investment performance. Finally, social interactions create peer effects in the disposition effect, highlighting the pivotal role of social dynamics in shaping investment decisions.

The growing population of retail and professional traders is vulnerable to cognitive and

emotional biases that impact financial decision-making and performance. Mindfulness

practices have been proposed as a method to mitigate these biases, yet existing re-

search has predominantly focused on short-term “state mindfulness” interventions or

self-reported “trait mindfulness,” leaving the effects of sustained mindfulness training

underexplored. This study examines the impact of “trained mindfulness” on trad-

ing decisions using a randomized controlled experiment. We analyse traders’ relative

and absolute returns across scenarios with varying uncertainty levels. Results indicate

that mindful traders underperform in low-uncertainty scenarios characterized by high

information load, with underperformance most pronounced following negative news

(-35.4%). The findings suggest that mindfulness attenuates negative emotional re-

sponses, potentially slowing reactions to adverse news and impairing market timing

under high information flow. This nuanced understanding contributes to the literature

on mindfulness and trading, highlighting the contextual nature of its effects.

This paper examines proxy contests and the value of shareholder voting rights (i.e., the voting premium) estimated using option prices. Our sample consists of 1,075 proxy contests for board seats at U.S. publicly listed firms from 1994 to 2020. We find that voting premium can help to predict the outcomes of the proxy contests. Specifically, increased voting premiums around campaign announcements are associated with higher likelihood of the contest being subsequently settled or going to a vote, and to a lower likelihood of the contest being withdrawn. Further, the likelihood of the dissidents being elected if the contest goes to a vote increases with the voting premium around the record date.

Blockholder influence has attracted recent interest, not only in the context of corporate boards but also in the context of decentralized autonomous organizations (DAOs). I analyze a model of project choice with dispersed information. I focus on the question of whether a blockholder should delegate control to a set of inside board members. I assume that agents' preferences are not aligned, in the sense that inside delegates derive private benefits from the acceptance of the proposal while the blockholder derives benefits from the rejection of the proposal. The blockholder chooses the composition of the board between inside delegates and direct representatives of her own interests. I find that when private interests are low, or signals are imprecise, there can be multiple equilibria. The most preferred equilibrium for the blockholder is the one with minimum meaningful delegation. This equilibrium also turns out to be the best for small investors and in particular, the equilibrium value of the firm is higher compared to full delegation. This gives rise to a blockholder premium.