Losers, Winners, and Biased Trades

Johnson, Joseph; Tellis, Gerard J.; MacInnis, Deborah J.

doi:10.1086/432241

Cited by 95 publications

(76 citation statements)

References 22 publications

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“…In this compelling example, the expectancy of a certain event (e.g., heads in a coin flip) becomes less likely after a long series of the same event (e.g., three successive tails). The phenomenon occurs across many situations, including casino gambling (Sundali and Croson, 2006), but also stock investment (Johnson et al, 2005). It is widely viewed as arising from the representativeness heuristic, the belief that a short segment of a random sequence should reflect the overall distribution (Rabin, 2002;Ayton and Fischer, 2004).…”

Section: Gambling-related Cognitive Distortionsmentioning

confidence: 99%

Pathological Choice: The Neuroscience of Gambling and Gambling Addiction

et al. 2013

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Gambling is pertinent to neuroscience research for at least two reasons. First, gambling is a naturalistic and pervasive example of risky decision making, and thus gambling games can provide a paradigm for the investigation of human choice behavior and "irrationality." Second, excessive gambling involvement (i.e., pathological gambling) is currently conceptualized as a behavioral addiction, and research on this condition may provide insights into addictive mechanisms in the absence of exogenous drug effects. This article is a summary of topics covered in a Society for Neuroscience minisymposium, focusing on recent advances in understanding the neural basis of gambling behavior, including translational findings in rodents and nonhuman primates, which have begun to delineate neural circuitry and neurochemistry involved.

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Section: Gambling-related Cognitive Distortionsmentioning

confidence: 99%

Pathological Choice: The Neuroscience of Gambling and Gambling Addiction

et al. 2013

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“…Lakonishok et al (Johnson et al, 2005) menemukan bahwa kinerja return dari glamour stock (saham dengan P/B yang tinggi) tidak sebagus value stock. Masih terdapat berbagai literatur yang membuktikan bahwa investor tidak berlaku rasional saat mengambil keputusan tentang investasi.…”

Section: Hasil Penelitian Sebelumnyaunclassified

“…Hasil ini mendukung teori Behavioral Finance yang dikemukakan oleh Barberis dan Thaler (2003), Shefrin (Johnson et al, 2005), Shiller (2005), dan Subrahmanyam (2008). Hasil ini juga sesuai dengan penelitian-penelitian sebelumnya seperti Odean (Johnson et al, 2005), Barber dan Odean (Barberis dan Thaler (2003), Wood dan Zaichkowsky (2004), 2011) dan lain-lain.…”

Section: Cluster 1 -Confident Big Traderunclassified

Perilaku Investor Di Pasar Modal Indonesia

Sumani¹,

Sandroto²,

Mula³

2017

EKUITAS

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The objective of this research is to classify thetype of individual investors in the Indonesia ABSTRAKPenelitian ini bertujuan untuk melakukan klasifikasi terhadap tipe investor individu di pasar modal Indonesia. Tujuan klasifikasi tersebut adalah, selain memberikan gambaran bagi perusahaan sekuritas tentang profil investor individu di pasar modal Indonesia, juga akan memberikan pengertian bagi investor individu tentang kebiasaan investasi mereka, sehingga bisa mendorong kebiasaan trading yang baik dan membuat investor memperoleh kinerja yang baik dari hasil investasi mereka. Dari profil investor tersebut, peneliti membuat petunjuk praktis yang memasukkan unsur Behavioral Finance ke dalam design alokasi aset yang sesuai dengan profil investor secara pribadi, sehingga lebih bermanfaat bagi kepentingan investor tersebut. Hasil penelitian ini menunjukkan bahwa investor individu di Indonesia cenderung bersifat irasional dalam berinvestasi, dimana mereka bisa digolongkan dalam dua kelompok besar. Kelompok pertama adalah kelompok confident big trader yang memiliki rasa percaya diri serta kontrol yang tinggi, serta nilai portfolio besar. Kelompok kedua adalah kelompok loss averse small trader yang memiliki rasa percaya diri serta kontrol yang tinggi, dengan nilai portfolio yang kecil.Kata kunci : klasifikasi, profil investor, irasional, confident big trader, loss averse small trader.

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“…A recent study by Johnson, Tellis and Macinnis (2005) provided evidence of a relationship between gambler's fallacy and hot-outcome effect in behavioral finance. Use of the gambler's fallacy heuristic leads investors to predict that an ongoing trend will reverse.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Considering the reviews, researches show that i) an investor's LOC (a measure of personal epistemology) would affect his/her heuristics which is in turn reflected in their investment decisions. Carvajal et al (2009) ii) investors make decisions based on the trend length and the valence of the stock investment Johnson et al (2005) and iii) prior investment experience is positively related to the use of the gambler's fallacy heuristic (Shefrin and Stateman, 1985). Accordingly, the proposed research model is that individual's LOC, heuristics namely hot-outcome and gambler's fallacy, prior investment experience, trend length and valence of the investment affect their stock investment decisions.…”

Section: Research Model and Hypotheses Developmentmentioning

confidence: 99%

Impact of Personal Epistemology, Heuristics and Personal Attributes on Investment Decisions

Kumaran¹

2013

International Journal of Financial Research

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Investors who choose to invest or divest their funds abruptly contribute to the instability of the stock market. In such a volatile market when one investor chooses to invest in companies in spite of unstable prices, others decide not to invest. What individual indifference factors might predict opposing investment decisions such as these? Finance Literature proves that heuristics are significantly related to risky decision making and but there have been no studies to explore whether locus of control plays a role in behavioral finance. The present study has been undertaken to investigate whether locus of control predicts hot-come effect and its converse gambler's fallacy, when making personal investment decisions. The study has also analyzed investment experience as a possible determinant of hot-outcome or gambler's fallacy heuristics. The collective effect of an individual's locus of control and investment experience on investment decisions has been predicted using structural equation modeling. The present study has been done in the Kingdom of Saudi Arabia where 144 investors with prior investment experience and 124 new investors completed the Rotter's (1954) LOC and the adopted version of an Investment Survey Questionnaire. Results suggest that hot-outcome heuristic, trend length, trend valence and prior investment experience are factors that influence personal financial decision making. Results affirm that novice investors tend to utilize the hot-outcome heuristic regardless of the reference groups, while experienced investors from both reference groups apply gambler's fallacy heuristics to decide on investments.

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Losers, Winners, and Biased Trades

Cited by 95 publications

References 22 publications

Pathological Choice: The Neuroscience of Gambling and Gambling Addiction

Pathological Choice: The Neuroscience of Gambling and Gambling Addiction

Perilaku Investor Di Pasar Modal Indonesia

Impact of Personal Epistemology, Heuristics and Personal Attributes on Investment Decisions

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