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Causes, consequences, and cures of myopic loss aversion - An experimental investigation Author info | Abstract | Publisher info | Download info | Related research | Statistics Gerlinde Fellner () (Department of Economics, Vienna University of Economics & B.A.)
Matthias Sutter () (University of Innsbruck, Deparment of Public Finance, and University of Goeteborg)
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We examine in an experiment the causes, consequences and possible cures of myopic loss aversion (MLA) for investment behaviour under risk. We find that both, investment horizons and feedback frequency contribute almost equally to the effects of MLA. Longer investment horizons and less frequent feedback lead to higher investments. However, when given the choice, subjects prefer on average shorter investment horizons and more frequent feedback. Exploiting the status quo bias by setting a long investment horizon or low feedback frequency as a default turns out to be a successful behavioural intervention that increases investment levels.
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Paper provided by Vienna University of Economics and B.A., Department of Economics in its series Department of Economics Working Papers with number
wuwp116.
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Date of creation: Jan 2008Date of revision:
Handle: RePEc:wiw:wiwwuw:wuwp116Note: PDF DocumentContact details of provider: Postal: Augasse 2-6, 1090 Vienna, Austria Web page: http://www.wu-wien.ac.at/portal/institute/departments/vwl
For technical questions regarding this item, or to correct its listing, contact: (Gerlinde Fellner).
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Paper Gerlinde Fellner & Matthias Sutter, 2005.
"Causes, consequences, and cures of myopic loss aversion - An experimental investigation ,"
Bonn Econ Discussion Papers
bgse16_2005, University of Bonn, Germany.
[Downloadable!] Gerlinde Fellner & Matthias Sutter, 2008.
"Causes, consequences, and cures of myopic loss aversion - An experimental investigation ,"
Jena Economic Research Papers
2008-004, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek.
[Downloadable!] Gerlinde Fellner & Matthias Sutter, .
"Causes, consequences, and cures of myopic loss aversion - An experimental investigation ,"
Working Papers
2008-01, Faculty of Economics and Statistics, University of Innsbruck.
[Downloadable!] Gerlinde Fellner & Matthias Sutter, 2005.
"Causes, consequences, and cures of myopic loss aversion - An experimental investigation ,"
Discussion Papers on Strategic Interaction
2005-15, Max Planck Institute of Economics, Strategic Interaction Group.
[Downloadable!] Gerlinde Fellner & Matthias Sutter, 2005.
"Causes, consequences, and cures of myopic loss aversion - An experimental investigation ,"
Discussion Papers
171, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
[Downloadable!] Find related papers by JEL classification: C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
This paper has been announced in the following NEP Reports :
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