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Events

CEMAP seminar series: Investor Attention, Reference Points and the Disposition Effect

Tuesday, 25 February 2020
16:00 to 17:30
Edika Quispe-Torreblanca (University of Oxford)
Durham University Business School Room 405

Speaker: Edika Quispe-Torreblanca (University of Oxford)

Abstract:

Studies of reference-dependent behaviour typically examine single reference points. Using data from an online brokerage, we examine the role of multiple reference points in trading behaviour. We show that, in addition to a traditional disposition effect for returns since purchase, there is also a disposition effect for returns since latest login, and a strong interaction between the two reference points: Even a tiny loss since the last login nullifies the positive effect of again since purchase. Given that logins are the product of a decision, these results highlight the importance of when people pay attention, with implications beyond investment decisions.

Credit to:

Edika Quispe-Torreblanca (University of Oxford)

John Gathergood (University of Nottingham)

George Loewenstein (Carnegie Mellon University)

Neil Stewart (Warwick Business School)

CEMAP seminar series: Investor Attention, Reference Points and the Disposition Effect

Tuesday, 25 February 2020
16:00 to 17:30
Edika Quispe-Torreblanca (University of Oxford)
Durham University Business School Room 405

Speaker: Edika Quispe-Torreblanca (University of Oxford)

Abstract:

Studies of reference-dependent behaviour typically examine single reference points. Using data from an online brokerage, we examine the role of multiple reference points in trading behaviour. We show that, in addition to a traditional disposition effect for returns since purchase, there is also a disposition effect for returns since latest login, and a strong interaction between the two reference points: Even a tiny loss since the last login nullifies the positive effect of again since purchase. Given that logins are the product of a decision, these results highlight the importance of when people pay attention, with implications beyond investment decisions.

Credit to:

Edika Quispe-Torreblanca (University of Oxford)

John Gathergood (University of Nottingham)

George Loewenstein (Carnegie Mellon University)

Neil Stewart (Warwick Business School)