Framing and the Disposition Effect in a Scopic Regime

This paper studies the influence of framing on the relationship between trading in a transparent trading environment (a "scopic regime") and the disposition effect. In principle, the recent literature agrees that social interactions alter investors' disposition effect. However, while some studies argue the disposition effect increases in a social environment, others provide evidence that the disposition effect decreases under a scopic regime. We show that the framing of the decision problem on social trading platforms affects the sign on this relationship, and thereby synthesize the existing findings. Individuals alter their behavior to optimize their social image under the given framing