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Causes, consequences, and cures of myopic loss aversion: An experimental investigation
Fellner, Gerlinde; Sutter, Matthias - 2008
We examine in an experiment the causes, consequences and possible cures of myopic loss aversion (MLA) for investment behaviour under risk. We find that both, investment horizons and feedback frequency contribute almost equally to the effects of MLA. Longer investment horizons and less frequent...
Persistent link: https://www.econbiz.de/10010293429
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Trading strategies and trading profits in experimental asset markets with cumulative information
Stöckl, Thomas; Kirchler, Michael - 2010
We study the use of trading strategies and their profitability in experimental asset markets with asymmetrically informed traders. We find that insiders make most of their profits from trades which are initiated by their limit orders especially at the beginning of a period and when the change in...
Persistent link: https://www.econbiz.de/10010294842
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Biases of professional exchange rate forecasts: Psychological explanations and an experimentally based comparison to novices
Leitner, Johannes; Schmidt, Robert; Bofinger, Peter - 2003
behavioural finance literature. To test whether this characteristic tends to be general human behaviour in an uncertain …
Persistent link: https://www.econbiz.de/10010305737
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Herding with and without Payoff Externalities - An Internet Experiment
Drehmann, Mathias; Oechssler, Jörg; Roider, Andreas - 2005
Most real world situations that are susceptible to herding are also characterized by direct payoff externalities. Yet, the bulk of the theoretical and experimental literature on herding has focused on pure informational externalities. In this paper we experi- mentally investigate the effects of...
Persistent link: https://www.econbiz.de/10011422136
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Cognitive Abilities and Behavioral Biases
Oechssler, Jörg; Roider, Andreas; Schmitz, Patrick W. - 2009
We use a simple, three-item test for cognitive abilities to investigate whether established behavioral biases that play … a prominent role in behavioral economics and finance are related to cognitive abilities. We find that higher test scores … on the Cognitive Reflection Test of Frederick (2005) indeed are correlated with lower incidences of the conjunction …
Persistent link: https://www.econbiz.de/10011422177
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Dynamic Choice, Independence and Emotions
Hopfensitz, Astrid; van Winden, Frans - 2006
From the viewpoint of the independence axiom of expected utility theory, an interesting empirical dynamic choice problem involves the presence of a “global risk,” that is, a chance of losing everything whichever safe or risky option is chosen. In this experimental study, participants have to...
Persistent link: https://www.econbiz.de/10010325272
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Complex Evolutionary Systems in Behavioral Finance
Hommes, Cars; Wagener, Florian - 2008
Traditional finance is built on the rationality paradigm. This chapter discusses simple models from an alternative approach in which financial markets are viewed as complex evolutionary systems. Agents are boundedly rational and base their investment decisions upon market forecasting heuristics....
Persistent link: https://www.econbiz.de/10010325725
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Price bubbles sans dividend anchors: Evidence from laboratory stock markets
Hirota, Shinichi; Sunder, Shyam - 2005
We experimentally explore how investor decision horizons influence the formation of stock prices. We find that in long-horizon sessions, where investors collect dividends till maturity, prices converge to the fundamental levels derived from dividends through backward induction. In short-horizon...
Persistent link: https://www.econbiz.de/10010332266
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Causes, consequences, and cures of myopic loss aversion: an experimental investigation
Fellner, Gerlinde; Sutter, Matthias - 2008
We examine in an experiment the causes, consequences and possible cures of myopic loss aversion (MLA) for investment behaviour under risk. We find that both, investment horizons and feedback frequency contribute almost equally to the effects of MLA. Longer investment horizons and less frequent...
Persistent link: https://www.econbiz.de/10010263857
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Herding with and without Payoff Externalities - An Internet Experiment
Drehmann, Mathias; Oechssler, Jörg; Roider, Andreas - 2004
Most real world situations which are susceptible to herding are also characterized by direct payoff externalities. Yet, the bulk of the theoretical and experimental literature focuses on pure informational externalities. In this paper we study several different forms of payoff externalities that...
Persistent link: https://www.econbiz.de/10010264905