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Are French Individual Investors reluctant to realize their losses?

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Author Info
Boolell-Gunesh S. () (Laboratoire de Recherche en Gestion et Economie, Université Louis Pasteur)
Broihanne M-H.
Merli M.

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Abstract

We analyze the presence of the disposition effect for 90 244 French individual investors based on a large brokerage account database between 1999 and 2006. Main results show that a) French investors demonstrate a strong preference for realizing their winning stocks rather than their losing ones (disposition effect).b) the behavioral bias is not eliminated for sophisticated individual investors (higher trading activity or international diversification) c) more originally, based on French account specificities, we demonstrate that the change of “fiscal account type” does not imply a change in investors’ behavior (at an individual level of the disposition effect).

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Paper provided by Laboratoire de Recherche en Gestion et Economie, Université de Strasbourg (France) in its series Working Papers of LaRGE (Laboratoire de Recherche en Gestion et Economie) with number 2008-09.

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Date of creation: 2008
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Handle: RePEc:lar:wpaper:2008-09

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G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Tversky, Amos & Kahneman, Daniel, 1992. " Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
  2. Hens, Thorsten & Vlcek, Martin, 2005. "Does Prospect Theory Explain the Disposition Effect?," Discussion Papers 2005/18, Department of Finance and Management Science, Norwegian School of Economics and Business Administration. [Downloadable!]
  3. Shapira, Zur & Venezia, Itzhak, 2001. "Patterns of behavior of professionally managed and independent investors," Journal of Banking & Finance, Elsevier, vol. 25(8), pages 1573-1587, August. [Downloadable!] (restricted)
  4. Kyle, Albert S. & Ou-Yang, Hui & Xiong, Wei, 2006. "Prospect theory and liquidation decisions," Journal of Economic Theory, Elsevier, vol. 129(1), pages 273-288, July. [Downloadable!] (restricted)
  5. Weber, Martin & Camerer, Colin F., 1998. "The disposition effect in securities trading: an experimental analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 33(2), pages 167-184, January. [Downloadable!] (restricted)
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  1. Shaneera Boolell-Gunesh, 2008. "Un portrait de l?investisseur individuel français," Working Papers of LaRGE (Laboratoire de Recherche en Gestion et Economie) 2008-12, Laboratoire de Recherche en Gestion et Economie, Université de Strasbourg (France). [Downloadable!]
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