Judgment and decision making research overwhelmingly uses null hypothesis significance testing as the basis for statistical inference. This article examines an alternative, Bayesian approach which emphasizes the choice between two competing hypotheses and quantifies the balance of evidence...

Oppenheimer and Monin (2009) recently found that subjectively rare events are taken to indicate a longer preceding sequence of unobserved trials than subjectively common events, an effect which they refer to as the retrospective gambler's fallacy. The current paper extends this idea to the...

The disposition effect is the reluctance to sell assets at a loss relative to a salient point of reference, typically assumed to be the purchase price. Using data on stocks and housing sales, we show that the peak price achieved by an asset during the investor's period of holding constitutes an...

In this article, we presented evidence that people are more risk averse when investing in financial products in the real world than when they make risky choices between gambles in laboratory experiments. In order to provide an account for this discrepancy, we conducted experiments, which showed...

Attention utility is the hedonic pleasure or pain derived purely from paying attention to information. Using data on brokerage account logins by individual investors, we show that individuals devote disproportionate attention to already-known positive information about the performance of...

Using transaction data from a sample of 1.8 million credit card accounts, we provide the first field test of a major prediction of Prelec and Loewenstein’s (1998) theory of mental accounting. The prediction is that consumers will pay off expenditure on transient forms of consumption more...

We study the allocation of attention to investment accounts among a large sample of individual investors. Investors login to view their accounts on average ten times more frequently than they trade, implying that login behavior is not primarily driven by trading activity. More diversified...