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The disposition effect and investor experience

Da Costa Jr, Newton; Goulart, Marco; Cupertino, Cesar; … - Volkswirtschaftliche Fakultät, … - 2013

We examine whether investing experience can dampen the disposition effect, that is, the fact that investors seem to hold on to their losing stocks to a greater extent than they hold on to their winning stocks. To do so, we devise a computer program that simulates the stock market. We use the...

Persistent link: https://www.econbiz.de/10011111236

Financial Literacy, Financial Education, and Economic Outcomes

Hastings, Justine S.; Madrian, Brigitte C.; Skimmyhorn, … - In: Annual Review of Economics 5 (2013) 1, pp. 347-373

In this article, we review the literature on financial literacy, financial education, and consumer financial outcomes. We consider how financial literacy is measured in the current literature and examine how well the existing literature addresses whether financial education improves financial...

Persistent link: https://www.econbiz.de/10010822972

Financial Literacy, Financial Education and Economic Outcomes

Madrian, Brigitte C.; Hastings, Justine S.; Skimmyhorn, … - National Bureau of Economic Research (NBER) - 2012

In this article we review the literature on financial literacy, financial education, and consumer financial outcomes. We consider how financial literacy is measured in the current literature, and examine how well the existing literature addresses whether financial education improves financial...

Persistent link: https://www.econbiz.de/10010785601

How Does Simplified Disclosure Affect Individuals' Mutual Fund Choices?

Laibson, David; Madrian, Brigitte C.; Beshears, John; … - National Bureau of Economic Research (NBER) - 2009

We use an experiment to estimate the effect of the SEC's Summary Prospectus, which simplifies mutual fund disclosure. Our subjects chose an equity portfolio and a bond portfolio. Subjects received either statutory prospectuses or Summary Prospectuses. We find no evidence that the Summary...

Persistent link: https://www.econbiz.de/10005830396

How to adapt to changing markets: experience and personality in a repeated investment game

Hopfensitz, Astrid; Wranik, Tanja - Volkswirtschaftliche Fakultät, … - 2009

particular, we found that optimism and anxiety were a liability in unfavorable markets, leading to unreasonable levels of risk …. Impulsivity was a liability in both favorable and unfavorable markets, leading to high risk on unfavorable markets, and low risk … in favorable markets. Openness to experience was an asset in unfavorable markets, leading to adjusted risk taking …

Persistent link: https://www.econbiz.de/10008531713

Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines

Ashraf, Nava; Karlan, Dean S.; Yin, Wesley - Economic Growth Center, Economics Department - 2005

We designed a commitment savings product for a Philippine bank and implemented it using a randomized control methodology. The savings product was intended for individuals who want to commit now to restrict access to their savings, and who were sophisticated enough to engage in such a mechanism....

Persistent link: https://www.econbiz.de/10005146683

Risky Curves: From Unobservable Utility to Observable Opportunity Sets

Friedman, Daniel; Sunder, Shyam - Cowles Foundation for Research in Economics, Yale University - 2011

useful for out-of-sample prediction. Nor do we find practical applications of Bernoulli functions in major risk …

Persistent link: https://www.econbiz.de/10009251218

Understanding Peer Effects in Financial Decisions: Evidence from a Field Experiment

Bursztyn, Leonardo; Ederer, Florian; Ferman, Bruno; … - National Bureau of Economic Research (NBER) - 2012

Using a high-stakes field experiment conducted with a financial brokerage, we implement a novel design to separately identify two channels of social influence in financial decisions, both widely studied theoretically. When someone purchases an asset, his peers may also want to purchase it, both...

Persistent link: https://www.econbiz.de/10010618276

Determinants of Individual Investor Behaviour: An Orthogonal Linear Transformation Approach

Chandra, Abhijeet; Kumar, Ravinder - Volkswirtschaftliche Fakultät, … - 2011

Expected utility theory views the individual investment decision as a tradeoff between immediate consumption and … deferred consumption. But individuals do not always prefer according to the classical theory of economics. Recent studies on … investment decisions in stock market. The present study considers this theory of irrationality of individual investors and …

Persistent link: https://www.econbiz.de/10008873558

Before and after: The impact of a real bubble crash on investors’ trading behavior in the lab

Gong, Binglin; Lei, Vivian; Pan, Deng - In: Journal of Economic Behavior & Organization 95 (2013) C, pp. 186-196

We report the results of an experiment designed to study whether or not having experienced booms and crashes in naturally occurring asset markets affects subjects’ trading behavior in the lab. Active investors in the Shanghai Stock Exchange were recruited to participate in either the Boom...

Persistent link: https://www.econbiz.de/10010719258