Jing Zhou

Biography

Jing Zhou is an Early Career Researcher in the School of Economics at the University of Edinburgh and is on the 2026-27 job market. She works in behavioral and experimental economics, behavioral finance, and information economics. Her research asks how complexity and the way information is presented shape beliefs and financial decisions, combining laboratory experiments with structural estimation and field data. Her job market paper, "Two Faces of Complexity in Correlation Neglect," shows that correlation neglect in portfolio choice has two distinct sources, cancellation complexity and tradeoff complexity, which leave different behavioral signatures and carry different welfare consequences, and tests the mechanism on CRSP data. Her other work develops a sequential binary method for eliciting imprecise beliefs and studies how the format of statistical information affects how well people update their beliefs, and whether they are sophisticated about it.

Job Market Paper Title

"Two Faces of Complexity in Correlation Neglect"

Abstract

Optimal portfolios depend on the correlation among asset returns, yet evidence on whether people respond to it is mixed. I show that a key driver is the complexity of two distinct cognitive operations that forming a portfolio requires, mirroring the two-step structure of the expected-utility axioms: canceling common-return states, which are choice-irrelevant (Cancellation Complexity, CC), and evaluating the cross-state tradeoff that remains (Tradeoff Complexity, TC). In an experiment that varies each friction separately while holding the expected-utility prediction fixed, both amplify mis-response to correlation — participants over-diversify even when the hedging opportunity vanishes — but through different channels. TC shifts the optimum participants perceive: an evaluation cost distorts choice toward portfolios that are easier to compare. CC shrinks the utility differences among allocations while leaving the tradeoff unchanged, and so carries no such cost. Outside the lab, I find evidence from U.S. stock returns consistent with the TC channel: the behavioral component of the comovement premium rises with the TC of a stock’s return distribution relative to the market’s, with no detectable change in its rational component.

JEL Classification Codes: D91, C91, D81, G11