Investors' Beliefs Drive Stock Market Dynamics Through Interaction Cycles.
The article explores how investors with different beliefs about stock prices interact in the market. Instead of just following their own predictions, investors also consider what others are doing. When prices are far from what they expect, they trust market signals less. But when everyone's behavior aligns, they trust the market more. This interaction affects how they make decisions to buy or sell stocks. The study shows that understanding these interactions is crucial for predicting stock market dynamics.