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Virtual seminar: Professor George Korniotis - University of Miami

Wednesday, 8 December 2021
14:00 to 15:20
Professor George Korniotis
MHL 223 or via Zoom

Topic: Grit, Loss Aversion, and Investor Behavior

As part of the External Economics and Finance Seminar Series in collaboration with Centre for Banking, Institutions and Development (CBID)


We examine whether grit affects individuals' preferences and trading decisions. Grit is the sustained effort toward a goal despite setbacks. It is malleable and distinct from the Big Five personality traits. Using experiments formalized in prospect theory, we find that grit reduces loss aversion. By diminishing loss aversion, gritty investors exhibit a lower disposition effect since they are more willing to exit losing investments. Consequently, they accumulate about 7% more wealth relative to control participants. Overall, grit affects the quality of investment decisions. Ultimately, our results suggest that interventions cultivating grit could improve households' financial outcomes.

Click here for more information on Professor George Korniotis.

Please click here to join the event remotely if you are unable to attend in person.