Wishful betting can contaminate financial markets, study shows

Wishful betting can contaminate financial markets, study shows: "In the paper, 'Contagion of Wishful Thinking in Markets,' researchers from The University of Texas at Austin and Cornell University demonstrate how wishful betting can contaminate beliefs throughout markets, as other market participants infer wishful bettors possess more favorable information than they do. As a consequence, investors who initially held accurate beliefs become overly optimistic about stock values. The research will be published in a forthcoming issue of Management Science."