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URL:
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http://ub-madoc.bib.uni-mannheim.de/1775
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URN:
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urn:nbn:de:bsz:180-madoc-17751
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Document Type:
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Working paper
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Year of publication:
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2007
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Publication language:
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English
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Institution:
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Business School > Sonstige - Fakultät für Betriebswirtschaftslehre
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MADOC publication series:
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Lehrstuhl für ABWL, Finanzwirtschaft, insb. Bankbetriebslehre (Weber) > Working Papers
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Subject:
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330 Economics
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Classification:
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JEL:
G11 D81 D14 C91 ,
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Subject headings (SWD):
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Wiederkauf , Investor , Anlageverhalten
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Keywords (English):
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Repurchase , Counterfactual Thinking , Experiment
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Abstract:
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We analyze two recently documented follow-on purchase and repurchase patterns experimentally: Individual investors’ preference for purchasing additional shares of a stock that decreased rather than increased in value succeeding an initial purchase (pattern 1) and investors’ tendency for purchasing stocks that they previously sold at a higher price (pattern 2). Similar to the field data study by Odean, Strahilevitz, and Barber (2004), subjects in our experiment are about 2.5 to 3 times as likely to purchase units of a single fictitious good if the price of the good declined following a purchase or sale in the previous period. As an assignment of choices clearly reduces the effect, we argue that investors are involved in counterfactual thinking: They refrain from purchasing additional shares or repurchasing shares at a higher price because doing so means admitting to their ex post wrong decision.
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Additional information:
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Available at SSRN: SSRN_ID1022927_code450170.pdf
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[Working paper]
![[img]](https://madoc.bib.uni-mannheim.de/style/images/fileicons/application_pdf.png)
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