Volatility In China Securities Markets

There are two Paradigms in the research area of decision making for a long time. Normal decision making is deeply involved in setting up mathematical models. Descriptive decision making is dedicated to exploring human real decision behaviors. But it is mainly concentrated on discovering heuristics and biases. It claims that human is irrational because it uses the rules of consistency and invariability to evaluate People's decision behaviors.Based on these theories, This research is Primarily concerned with emotion which has the strong taste of mentality. It's main issue is to investigate the mechanisms of the impact of emotion on decision making from the perspective of emotion's function. On research Paradigms, while it is in line with that of description to investigate People's real decision behavior, it is not stubborn to claim that human is irrational to violate the rules of consistency and invariability in the Process of decision making. This paper studies the factors that influence emotion and how emotions influence decision making by using the empirical way.This article includes nine chapters. The first chapter is introduction. This chapter reviews the emotion theories related to cognition and decision making and studies the relation between emotion and decision making. The last is the meaning and way of this study. The second chapter studies the role of emotion in decision making. The chapter distinguishes two different ways —they are expected emotion and immediate emotion, in which emotions enter into decision making. Lastly, the paper builds a model of decision-making that integrates the influence of system analysis, intuition and emotions. Based on the second chapter, this chapter proposes a new mood fluctuations model in which the mood fluctuations are modeled as the fluctuations in the discount factor, risk-aversion coefficient.. Then this chapter build mathematics model to research how mood fluctuations influence stock prices.The fourth chapter investigates whether there exists a relationship between proxy variables for investor mood (based on the weather) and daily Shanghai stock returns. The evidence is that some of the variables proposed in the literature can influence investor's emotion and decision making. The fifth chapter analyzes the effect of holidays on Shanghai stock market.The results suggest that Shanghai stock market have the effect of holidays. The sixth chapter documents robust links between seasonal variation in length of day, seasonal depression, risk aversion, and stock market returns. The seasonality can be explained using a conditional version of the CAPM that allows the price of risk to vary over time. This chapter investigates whether there are certain stock price patterns during the trading sessions in Chinese stock market. The eighth chapter studies on the market behavior of closed-end funds discounts and suggests this effect is mainly affected by investor's sentiment. The last chapter is the paper's conclusions and future study's directions.