The following figures come from the paper All that glitters: The effect of attention and news on the buying behavior of individual and institutional investors by Barber and Odean (RFS, 2008). Explain why the net buying conditional on previous day's return differ between individuals investors (Panel A) and institutional investors (Panel B)? Panel A: individual investors Panel B: institutional investors 30 25 -Large Discount Brokerage 25 20 -Large Retail Brokerage 15 20 Small Discount Brokerage 10 5 Percent Buy-Sell Imbalance by Number of Trades Percent Order Imbalance 0 -5 -10 5 -15 Momentum Manager Value Manager 0 -20 Diversified Manager -5 -25 1a 10b 1a 10b 1b 2. 3 4 5 6 7 8 9 10a Partitions of Stocks Sorted on Previous Day's Retum 1b 2 3 4 5 6 7 8 9 10a Partitions of Stocks Sorted on Previous Day's Return The following figures come from the paper All that glitters: The effect of attention and news on the buying behavior of individual and institutional investors by Barber and Odean (RFS, 2008). Explain why the net buying conditional on previous day's return differ between individuals investors (Panel A) and institutional investors (Panel B)? Panel A: individual investors Panel B: institutional investors 30 25 -Large Discount Brokerage 25 20 -Large Retail Brokerage 15 20 Small Discount Brokerage 10 5 Percent Buy-Sell Imbalance by Number of Trades Percent Order Imbalance 0 -5 -10 5 -15 Momentum Manager Value Manager 0 -20 Diversified Manager -5 -25 1a 10b 1a 10b 1b 2. 3 4 5 6 7 8 9 10a Partitions of Stocks Sorted on Previous Day's Retum 1b 2 3 4 5 6 7 8 9 10a Partitions of Stocks Sorted on Previous Day's Return