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    Mendel, Brock, and Andrei Shleifer. 2012. “Chasing Noise.” Journal of Financial Economics 104 (2): 303-320. Abstract
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    We present a simple model in which rational but uninformed traders occasionally chase noise as if it were information, thereby amplifying sentiment shocks and moving prices away from fundamental values. In the model, noise traders can have an impact on market equilibrium disproportionate to their size in the market. The model offers a partial explanation for the surprisingly low market price of financial risk in the spring of 2007.
    Copyright 2011 Elsevier B.V. All rights reserved.

    Lee, Charles MC, Andrei Shleifer, and Richard H Thaler. 1990. “Closed End Mutual Funds.” Journal of Economic Perspectives 4 (4): 153-164.
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    Mullainathan, Sendhil, Joshua Schwartzstein, and Andrei Shleifer. 2008. “Coarse Thinking and Persuasion.” Quarterly Journal of Economics 123 (2): 577-619. Abstract
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    We present a model of uninformative persuasion in which individuals “think coarsely”: they group situations into categories, and apply the same model of inference to all situations within a category. Coarse thinking exhibits two features that persuaders take advantage of: (i) transference, whereby individuals transfer the informational content of a given message from situations in a category where it is useful to those where it is not, and (ii) framing, whereby objectively useless information influences individuals’ choice of category. The model sheds light on uninformative advertising and product branding, as well as on some otherwise anomalous evidence on mutual fund advertising.

    Glaeser, Edward, Simon Johnson, and Andrei Shleifer. 2001. “Coase versus the Coasians.” Quarterly Journal of Economics 116 (3): 853-899.
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    Barberis, Nicholas, Andrei Shleifer, and Jeffrey Wurgler. 2005. “Comovement.” Journal of Financial Economics 75 (2): 283-317. Abstract
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    Building on Vijh (Rev. Financial Stud. 7 (1994)), we use additions to the S&P 500 to distinguish two views of return comovement: the traditional view, which attributes it to comovement in news about fundamental value, and an alternative view, in which frictions or sentiment delink it from fundamentals. After inclusion, a stock’s beta with the S&P goes up. In bivariate regressions which control for the return of non-S&P stocks, the increase in S&P beta is even larger. These results are generally stronger in more recent data. Our findings cannot easily be explained by the fundamentals-based view and provide new evidence in support of the alternative friction- or sentiment-based view.
    Copyright 2004 Elsevier B.V. All rights reserved.

    Bordalo, Pedro, Nicola Gennaioli, and Andrei Shleifer. 2016. “Competition for Attention.” Review of Economic Studies 83 (2): 481-513. Abstract
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    We present a model of market competition in which consumers' attention is drawn to the products' most salient attributes. Firms compete for consumer attention via their choices of quality and price. Strategic positioning of a product affects how all other products are perceived. With this attention externality, depending on the cost of producing quality some markets exhibit “commoditized” price salient equilibria, while others exhibit “de-commoditized” quality salient equilibria. When the costs of quality change, innovation can lead to radical shifts in markets, as in the case of decommoditization of the coffee market by Starbucks. In the context of financial innovation, the model generates the phenomenon of “reaching for yield”.

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