IDEAS home Printed from https://ideas.repec.org/a/igg/jabe00/v2y2013i3p15-26.html
   My bibliography  Save this article

Does the Color of Feedback Affect Investment Decisions?

Author

Listed:
  • Tal Shavit

    (The School of Business Administration, The College of Management Academic Studies, Israel)

  • Mosi Rosenboim

    (The School of Business Administration, The College of Management Academic Studies, Israel)

  • Chen Cohen

    (Department of Economics and Management, The Open University of Israel, Raanana, Israel)

Abstract

This paper presents a multi-period experiment that extends a classic experiment on investment allocation preferences by adding colors to the feedback returned to participants. The results show that investors allocate the same proportion of their investment to the stock and the bond funds without regard to the colors. However, red feedback activates an avoidance motivation (vs. an approach motivation), and this reduces chasing past returns. The authors also found that the color of the feedback affected the time needed to make a decision. Financial institutions might use colored feedback to encourage approach or avoidance motivations in their clients.

Suggested Citation

  • Tal Shavit & Mosi Rosenboim & Chen Cohen, 2013. "Does the Color of Feedback Affect Investment Decisions?," International Journal of Applied Behavioral Economics (IJABE), IGI Global, vol. 2(3), pages 15-26, July.
    • Handle: RePEc:igg:jabe00:v:2:y:2013:i:3:p:15-26
    as

    Download full text from publisher

    File URL: http://services.igi-global.com/resolvedoi/resolve.aspx?doi=10.4018/ijabe.2013070102
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:igg:jabe00:v:2:y:2013:i:3:p:15-26. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journal Editor (email available below). General contact details of provider: https://www.igi-global.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.