Attention utility is the hedonic pleasure or pain derived purely from paying attention to information. Using data on brokerage account logins by individual investors, we show that individuals devote disproportionate attention to already-known positive information about the performance of...

Studies of reference-dependent behavior typically examine single reference points. Using data from an online brokerage, we examine the role of multiple reference points in trading behavior. We show that, in addition to a traditional disposition effect for returns since purchase, there is also a...

Attention utility is the hedonic pleasure or pain derived purely from paying attention to information. Using data on brokerage account logins by individual investors, we show that individuals devote disproportionate attention to already-known positive information about the performance of...

Using friendship data from Facebook, we study the effects of three aspects of social capital on household financial behavior. We find that the most important measure of social capital in explaining stock market and saving participation is Economic Connectedness, defined as the fraction of one's...

Covid-19 and the unprecedented surge in financial technology contributed to unexpected financial challenges, affecting the relevance of financial decision making and perceived financial well-being. This paper examines the mediating effects of digital financial literacy, financial autonomy,...

The traditional finance theory assumed that investors are cogent while making an investment decision, but the investment theories found a new direction after the inception of behavior finance theories. The role of psychology is significant in investment decisions, and many external and internal...

Market sentiment drives fluctuations in financial markets, but it is measured with empirical proxies lacking strong theoretical foundations. In a generalization of the Consumption CAPM where the representative agent has a prospect theory probability weighting function, we derive a formula for...

The field of behavioural finance points out various investor biases and heuristics which inhibit optimal investment choices and are sometimes deemed irrational. Although emotions are often viewed as anathema to sound financial decisions, there is a big emotional component that has to be taken...

This paper studies the behaviour of retail investors, that tend to be unwilling to make fi nancial decisions on their own and therefore follow other investors' strategies on online trading platforms, in particular with respect to their proneness towards the disposition effect. Therefore, we...

We theoretically show that there is a fundamental disconnect between the disposition effect, i.e., investors’ tendency to sell winning assets too early and losing assets too late, and its common empirical measure, namely a positive difference between the proportion of gains and losses...