Anastassia Fedyk received her B.A. in Mathematics from Princeton University in 2010. Prior to joining the Business Economics program at HBS, she spent two years doing research and portfolio management in the Quantitative Investment Strategies group at Goldman Sachs Asset Management, where she worked on sector-specific signals, statistical arbitrage strategies, and regime-switching models. Anastassia's current research interests lie mostly in Behavioral Economics and Financial Economics. Her work focuses on optimal incentive structures for individuals with time-inconsistent preferences and overconfidence, and the ways in which financial markets react to news. Anastassia also enjoys teaching, and offers an undergraduate course covering different areas of Behavioral Economics and Finance each year. She has been awarded the Harvard University Certificate of Distinction in Teaching three years running.
Asymmetric Naivete: Beliefs about Self-Control
Existing work on time-inconsistent preferences has focused on modeling single time-inconsistent agents in isolation. Yet many situations where time-inconsistent preferences play a key role – teams of employees in corporations, households' consumption decisions, group classroom assignments – involve interactions between multiple biased agents. In order to understand these interactions, it is necessary to establish what beliefs individuals hold not only regarding their own time-inconsistency, but also regarding the time-inconsistency of others. This paper offers an experimental investigation of individuals' beliefs regarding their own and others' time-inconsistency within the same framework. Subjects engaged in a real effort task are asked to predict their own future behavior and the average behavior of the other subjects. Participants making predictions regarding their own decisions provide an estimate of self-awareness, while those making predictio ns regarding others provide beliefs about time-inconsistency of others. I document a wedge in beliefs regarding self and others: subjects display virtually no awareness of their own time-inconsistency, but anticipate some time-inconsistency in others. This wedge is robust to eliciting incentivized or unincentivized beliefs, as well as to comparing beliefs regarding self and other within subjects or across independent subjects.
When Can the Market Identify Stale News?
We document an "aggregation effect" in reactions to stale news. Using a novel dataset of news transmission through the Bloomberg terminal, we differentiate stale news into two types: "duplicate" stories that directly restate single previous articles and "aggregate" stories that combine content from several previous articles. We conjecture that duplicate stories are more immediately identifiable as stale than aggregate stories. The empirical results confirm this hypothesis: absolute abnormal returns for a firm are higher when it has more aggregate stories relative to duplicate ones, and these returns are more likely to reverse over the following week. Time trends in the estimated coefficients indicate that reactions to stale stories have decreased over time, but the differential reactions to aggregate versus duplicate stories have risen. Altogether, the results point to investors' increased sophistication in identifying stale information in duplicate stories, but continuing susceptibility to old news in the form of aggregate stories.
Overcoming Overconfidence: Teamwork and Self-Control
This paper analyzes interactions between agents who are overconfident regarding their own future self-control relative to others. The paper considers the problem of incentivizing several such agents, and compares two methods: assigning work individually to each agent or jointly to pairs of agents. If the agents are homogenous in their preferences and beliefs, then the joint assignment method dominates individual assignments. In the case of heterogenous agents, the effects of the joint assignment are twofold: teamwork mitigates the efficiency loss from overconfidence, but introduces inefficiency by disincentivising the more patient members of the team. The results in the paper suggest that team-based incentives are more effective when employees are relatively overconfident and when teams are formed based on similarity in present-bias and beliefs.
Ms. Fedyk's main research interests lie in understanding how psychological biases affect decision-making in organizations and financial markets. She has studied the optimal scheduling of work assignments when employees have self-control problems, and stressed the importance of understanding the differences in individuals' perceptions of their own versus others' self-control problems.
Anastassia is also interested in how cognitive biases impact market reactions to financial news. In joint work with James Hodson at Bloomberg L.P., she has observed that the U.S. equity market reacts to news that has no novel informational content, but aggregates previously available information from several sources. Ms. Fedyk's most recent work looks directly at finance professionals' consumption of financial news to understand which market participants are most responsible for incorporating information into asset prices, and the mechanism through which this incorporation occurs.
Information in Financial Markets (Econ 970, Spring 2016)
Second-year undergraduate course covering various aspects of information propagation in financial markets. The course is divided into four units. We begin by covering canonical pricing anomalies that illustrate the importance of information distribution and consumption in financial markets. The course then presents current research on reactions to information contained in news, before addressing the question of whether sophisticated players such as institutional investors have superior skill in acquiring and processing information, and whether they can profit from information-processing biases of others. The course concludes by examining some key psychological biases, such as overconfidence, that are likely to afflict even the most competent finance market participants. The class covers a variety of well-established and more recent academic work, and is evenly split between a lecture component and a seminar-style discussion.
Behavioral Finance (Econ 970, Spring 2015)
Second-year undergraduate course covering recent advances in the field of behavioral finance. The course begins by examining some of the most canonical pricing anomalies, such as claims to identical cashflows trading at different prices in different markets, and reprinting of five-months-old news leading to a large market reaction, irrelevant name changes boosting companies’ prices. Research covered in the class addresses the reasons that allow such mispricing to occur and persist. The course introduces the students to reading and critically evaluating research articles, and is heaviy discussion-based.
Behavioral Economics and Applications in Markets (Econ 970, Spring 2013 and 2014)
Second-year undergraduate course introducing students to academic research in the field of behavioral economics. The course covers key models of time-inconsistent preferences, overconfidence, social preferences, and projection bias. The students are introduced to theoretical models of these behavioral biases as well as empirical and experimental tests of such models, and applications to a variety of real-world market interactions. The course is intensely discussion-based.
Awards & Honors
Awarded a Harvard University Certificate of Distinction in Teaching from the Derek Bok Center for Teaching and Learning three years running, in 2013, 2014, and 2015.
Awarded grants from the Russell Sage Foundation, the Pershing Square Fund for Research on the Foundations of Human Behavior, and the Lab for Economic Applications and Policy for experimental project "Asymmetric Naivete: Beliefs about Self-Control.