Using non-invasive brain stimulation to test the role of self-control in investor behavior

Jianbiao Li, Xiaofei Niu, Dahui Li, Qian Cao

We test whether self-control causally affects investor behavior with the non-invasive brain stimulation. Subjects trade stocks in an experimental asset market while their levels of self-control are exogenously varied by applying weak currents stimulation to a control-related brain area. We document that modulation of regional cortical excitability related to self-control significantly influences the propensity of realizing capital gains as well as capital losses. Our finding provides support for the role of self-control in the disposition effect and highlights the utility of using non-invasive brain stimulation to causally test the underlying mechanism of investor behavior.

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Year of publication:	[2018]
Authors:	Li, Jianbiao ; Niu, Xiaofei ; Li, Dahui ; Cao, Qian
Publisher:	[Kiel : ZBW
Subject:	self-control \| investor behavior \| disposition effect \| non-invasive brain stimulation \| Anlageverhalten \| Behavioural finance \| Experiment \| Verhaltensökonomik \| Behavioral economics \| Neuroökonomie \| Neuroeconomics \| Kognition \| Cognition \| Persönlichkeitspsychologie \| Personality psychology