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Waning vigilance and the disposition effect: Evidence from Thailand on individual investor decision making

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  • DeWeaver, Mark A.
  • Shannon, Randall

Abstract

We argue that existing explanations for the stock-market investor's disposition to "ride losers too long" are unsatisfactory because they abstract from any role for information processing. We propose instead that the disposition effect is a special case of "waning vigilance:" investors pay less attention to new information and analysis when making decisions about loss makers and are therefore slower to sell them when arguments in favor of holding cease to be valid. Results from a Thai individual investor survey are presented as empirical evidence in support of the hypothesis that vigilance is reduced following losses.

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  • DeWeaver, Mark A. & Shannon, Randall, 2010. "Waning vigilance and the disposition effect: Evidence from Thailand on individual investor decision making," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(1), pages 18-23, January.
    • Handle: RePEc:eee:soceco:v:39:y:2010:i:1:p:18-23
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    2. Anurag Agarwal & Ajay Verma & Rajiv Kumar Agarwal, 2016. "Factors Influencing the Individual Investor Decision Making Behavior in India," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 5(4), pages 211-222, November.

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