Stock market entry timing and retail investors' disposition effect

Zhang, Xiaotao; Wang, Ziqiao; Hao, Jing; Liu, Jiubiao

doi:10.1016/j.irfa.2022.102205

Cited by 9 publications

(3 citation statements)

References 59 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…While they found the disposition effect among retail traders in general, it was more pronounced among the leaders who gave trading guidance to their followers. Similarly, Ahn (2022) and Zhang et al (2022) . /frbhe.…”

Section: Evidence Of the Disposition E Ectmentioning

confidence: 94%

Information and context matter: debiasing the disposition effect with lasting impact

Huang,

Guenther

2024

Front. Behav. Econ.

View full text Add to dashboard Cite

The disposition effect is one of the most prominent and widely studied behavioral biases observed among investors. It describes the tendency to close out winning investments prematurely while holding on to losing ones for too long and is generally associated with reduced investment returns. Researchers have explored various debiasing strategies and interventions to mitigate the disposition effect and its detrimental impact on returns. We summarize a between-subject experiment with n = 132 UK participants testing the impact of an informational feedback-like intervention to mitigate the disposition effect, informing participants about the disposition effect. Moreover, we re-examine our intervention's impact in the follow-up measurements which are 2 weeks and again 3 months after the first measurement. We find our intervention to have a significant impact, reducing the disposition effect in the first measurement. In addition, we still find a significant impact of the intervention, reducing the disposition effect after 2 weeks, while no significant impact is observed at the 3-month point. While we find a higher disposition effect to be associated with lower returns for one measurement, the opposite is true for the other two measurements. Moreover, the intervention had a return reducing impact for one measurement and no significant impact for the other two. Overall, our study shows a promising intervention that may be readily deployed among retail investors with a somewhat lasting impact to mitigate the disposition effect. However, our study also shows that the relationship between the disposition effect and investment returns is nuanced.

show abstract

Section: Evidence Of the Disposition E Ectmentioning

confidence: 94%

Information and context matter: debiasing the disposition effect with lasting impact

Huang,

Guenther

2024

Front. Behav. Econ.

View full text Add to dashboard Cite

show abstract

“…Temuan yang diperoleh juga sejalan dengan penelitian Saputra et al, (2020) menemukan bahwa semakin tinggi risiko yang akan dihadapi dalam berinvestasi akan semakin menurunkan keputusan investai merkea. Selanjutnya hasil penelitian Zhang et al, (2022), serta hasil penelitian yang diperoleh Jude dan Silaghi (2016) yang sama sama menemukan pemahaman yang tinggi pada faktor risiko akan cenderung membuat investor menghindari risiko yang dapat memicu kerugian, sehingga mengurangi keinginan mereka untuk berinvestasi khususnya pada saham saham memiliki risiko ketidakpastian yang tinggi.…”

Section: Pengaruh Sikap Pada Risiko Terhadap Keputusan Investasi Saha...unclassified

Pengaruh Bias Perilaku Investor Terhadap Keputusan Investasi Di Pasar Saham

Fitra

2023

jckema

View full text Add to dashboard Cite

The goal of this study was to analyze and collect data on the variables that affect a person's ability to make informed investing decisions. 158 respondents made up the study's sample population. The information utilized this research were primary data collected using survey methods, and the sample was gathered through the distribution of research questionnaires. The The findings of this study demonstrate that herding behavior positively affects investment choices, Heuristic Behavior has no effect on Investment Decisions, Disposition Effect has a positive effect on Investment Decisions, and Attitudes on Risk have a negative and significant effect on Investment Decisions. And recommendations for more study are anticipated to be a reference in making decisions and adjusting the variables used with each other's psychology before making investment making choices so they can reduce risk and increase the revenue obtained and also before making decisions for novice investors are expected to try to learn the concept invest or ask friends or individuals who have experience in investing before making a decision because it is important to reduce the risk of loss and encourage success in investing in securities, especially stocks.

show abstract

“…The phenomenon mainly exists because of a bias called mental accounting (Danbolt et al , 2022), which states that investors use reference prices to make decisions instead of their actual gains and losses (Thaler, 1985). Apart from emotional factors, some of the possible drivers of the bias include cognitive dissonance (Altanlar et al , 2019), (Chang et al , 2016), belief-based trading (Ben-David and Hirshleifer, 2012), investor demographics and socio-cultural factors (Zhang et al , 2022). Despite the extent of research on the issue, the empirical evidence on the factors behind the disposition effect is still inconclusive (Bazley et al , 2022), making it an interesting area for research.…”

Section: Introductionmentioning

confidence: 99%

Shed old baggage and invest wisely. A bibliometric and thematic analysis of disposition effect and investment

Mundi

Vashisht

2023

QRFM

View full text Add to dashboard Cite

Purpose This paper aims to review, systematize and integrate existing research on disposition effect and investments. This study conducts bibliometric analysis, including performance analysis and science mapping and thematic analysis of studies on disposition effect. Design/methodology/approach This study adopted a thematic and bibliometric analysis of the papers related to the disposition effect. A total of 231 papers published from 1971 to 2021 were retrieved from the Scopus database for the study, and bibliometric analysis and thematic analysis were performed. Findings This study’s findings demonstrate that research on the disposition effect is interdisciplinary and influences the research in the domain of both corporate and behavioral finance. This review indicates limited research on cross-country data. This study indicates a strong presence of work on investor psychology and behavioral finance when it comes to the disposition effect. The findings of thematic analysis further highlight that most of the research has focused on prospect theory, trading strategies and a few cognitive and emotional biases. Practical implications The findings of this study can be used by investors to minimize their biases and losses. The study also highlights new techniques in machine learning and neurosciences, which can help investment firms better understand their clients’ behavior. Policymakers can use the study’s findings to nudge investors’ behavior, focusing on minimizing the effects of the disposition effect. Originality/value This study has performed the quantitative bibliometric and thematic analysis of existing studies on the disposition effect and identified areas of future research on the phenomenon of disposition effect in investments.

show abstract

Stock market entry timing and retail investors' disposition effect

Cited by 9 publications

References 59 publications

Information and context matter: debiasing the disposition effect with lasting impact

Information and context matter: debiasing the disposition effect with lasting impact

Pengaruh Bias Perilaku Investor Terhadap Keputusan Investasi Di Pasar Saham

Shed old baggage and invest wisely. A bibliometric and thematic analysis of disposition effect and investment

Contact Info

Product

Resources

About