Summary of A Tough Act to Follow

Looking for the report?
We have the summary! Get the key insights in just 5 minutes.

A Tough Act to Follow summary
Start getting smarter:
or see our plans




  • Analytical
  • Innovative
  • For Experts


Economists studying the machinations of markets have posited behavioral theories on how participants formulate their decisions. Rational expectations, adaptive expectations and the efficient market theory provide insights on the ebbs and flows of asset prices. But professors Samuel M. Hartzmark and Kelly Shue offer another vantage point on equity price fluctuations: “Contrast effects” occur when previous information creates a bias among investors. Traders, investors and analysts interested in exploring market behavior will find this a valuable report.

About the Authors

Samuel M. Hartzmark is a professor at the University of Chicago Booth School of Business. Kelly Shue is a professor at the Yale School of Management.



When people evaluate the attractiveness of a romantic partner, a job candidate or a potential new home, they often make decisions by comparing the current option with previous ones. Such “contrast effects” can skew perceptions of choices higher or lower than their real value and lead to poor decisions. Researchers set out to determine whether contrast effects can also bias investors’ actions in financial markets. Investors and traders pay close attention to quarterly earnings reports to monitor the health of a firm and forecast its future stock price trajectory. Even...

More on this topic

Customers who read this summary also read

Data Analytics and Improving Investor Behavior
7 Mistakes Every Investor Makes (and How to Avoid Them)
One Hour Investor
Getting Back to Business
Investment Banking Explained
Capital Markets: How Artificial Intelligence Will Set the Price for Credit

Related Channels

Comment on this summary