We provide an overview of research on the stock trading behavior of individual investors. This research documents that individual investors (1) underperform standard benchmarks (e.g., a low cost index fund), (2) sell winning investments while holding losing investments (the “disposition...

The article presents an interview with Vernon L. Smith, winner of the 2002 Nobel Prize in Economic Sciences. Smith discusses his belief that behavioral and experimental economics are complementary. He comments upon optimal bidding behavior in auctions as revealed by some of his earlier work. In...