Does Binding or Feeback Influence Myopic Loss Aversion - An Experimental Analysis

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Does Binding or Feeback Influence Myopic Loss Aversion - An Experimental Analysis

Author Info

Langer, Thomas () (Westfälischen Wilhelms-Universität Münster Lehrstuhl für BWL, insbesondere Finanzierung)
Weber, Martin () (Lehrstuhl für ABWL, Finanzwirtschaft, insb. Bankbetriebslehre)

Abstract

Empirical research has shown that a lower feedback frequency combined with a longer bind-ing period decreases myopia and thereby increases the willingness to invest into a risky asset. In an experimental study, we disentangle the intertwined manipulation of feedback frequency and binding period to analyze how both variables alone contribute to the change in myopia and how they interact. We find a strong effect for the length of commitment, a much less pro-nounced effect for the feedback frequency, and a strong interaction between both variables. The results have important implications for real world intertemporal decision making.

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Paper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number 03-20.

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Length: 19 pages
Date of creation: 09 Oct 2003
Date of revision:
Handle: RePEc:xrs:sfbmaa:03-20

Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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This paper has been announced in the following NEP Reports:

NEP-ALL-2003-10-20 (All new papers)
NEP-EXP-2003-10-20 (Experimental Economics)

References listed on IDEAS
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Other versions:
- Michael Haigh & John A. List, 2005. "Do Professional Traders Exhibit Myopic Loss Aversion? An Experimental Analysis," Artefactual Field Experiments 0045, The Field Experiments Website. [Downloadable!]
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Other versions:
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Other versions:
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