Investment Performance and Emotions : An International Study

Hypothetical stock market investment experiment in six countries reveals that after controlling for the average profit in the whole stock market subjects prefer losing money rather than gaining money as long as their so-called "friends" lose more money. The sad result is that only 8.2% of the subjects either ignore the peer group's investment performance, as advocated by the classic univariate expected utility paradigm, or exhibit a consistently favorable response toward their friends, which is a necessary condition for the existence of altruism. The hostility of subjects toward their friends is greater in less wealthy countries. We provide some possible explanations for these results