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Investor information search

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  • Loibl, Cäzilia
  • Hira, Tahira K.
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    Abstract

    Few will disagree that information search is essential in making investment decisions, a high-consequence decision task. Yet, the sources of investor information have never been used as a segmentation base to study investment behavior. We analyze survey results of investors in the US using information search, demographic, psychological, and involvement variables. Cluster analysis shows five typologies for investor information search based on sources of information. We also discover the majority of investors perform moderate- to low-information gathering strategies. The 11 demographics variables were insufficient to describe the typologies, although we did find higher-educated male investors with higher earnings more likely to practice a high-information search strategy, confirming previous studies. Turning to the psychological and involvement variables, we develop distinct typologies and identify several significant predictors for the five investor groups. For the majority of investors, investment decisions present a considerable and unwillingly undertaken challenge, and this study concludes with a discussion of how to target these investor typologies with approaches grounded in behavior-change theory.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Economic Psychology.

    Volume (Year): 30 (2009)
    Issue (Month): 1 (February)
    Pages: 24-41

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    Handle: RePEc:eee:joepsy:v:30:y:2009:i:1:p:24-41

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    Web page: http://www.elsevier.com/locate/joep

    Related research

    Keywords: Information search Investments Involvement;

    References

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    Cited by:
    1. Lemieux, James & Peterson, Robert A., 2011. "Purchase deadline as a moderator of the effects of price uncertainty on search duration," Journal of Economic Psychology, Elsevier, vol. 32(1), pages 33-44, February.
    2. Muehlfeld, Katrin & Weitzel, Utz & van Witteloostuijn, Arjen, 2013. "Fight or freeze? Individual differences in investors’ motivational systems and trading in experimental asset markets," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 195-209.
    3. Oppewal, Harmen & Paas, Leonard J. & Crouch, Geoffrey I. & Huybers, Twan, 2010. "Segmenting consumers based on how they spend a tax rebate: An analysis of the Australian stimulus payment," Journal of Economic Psychology, Elsevier, vol. 31(4), pages 510-519, August.
    4. Ann Yang, 2013. "Decision Making for Individual Investors: A Measurement of Latent Difficulties," Journal of Financial Services Research, Springer, vol. 44(3), pages 303-329, December.
    5. repec:eme:qrfmpp:v:3:y:2011:i:2:p:6-25 is not listed on IDEAS

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