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Investor Logins and the Disposition Effect

Author

Listed:
  • Edika Quispe-Torreblanca

    (Leeds University Business School, University of Leeds, Leeds LS2 9JT, United Kingdom; Saïd Business School, University of Oxford, Oxford OX1 1HP, United Kingdom)

  • John Gathergood

    (School of Economics, University of Nottingham, Nottingham NG7 2RD, United Kingdom; Network for Integrated Behavioural Science, Nottingham NG7 2RD, United Kingdom)

  • George Loewenstein

    (Social and Decision Sciences, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213)

  • Neil Stewart

    (Network for Integrated Behavioural Science, Nottingham NG7 2RD, United Kingdom; Warwick Business School, University of Warwick, Coventry CV4 7AL, United Kingdom)

Abstract

Using data from an online brokerage, we examine the role of investor logins in trading behavior. We find that a new reference point is created when an investor logs in and views the investor’s portfolio. We observe this as a disposition effect on returns since last login in addition to the traditional disposition effect on returns since purchase. Further, these reference points produce a strong interaction such that even a small loss since last login nullifies the positive effect of a gain since purchase. This interaction follows if investors select the higher, more aspirational price as a reference point.

Suggested Citation

  • Edika Quispe-Torreblanca & John Gathergood & George Loewenstein & Neil Stewart, 2025. "Investor Logins and the Disposition Effect," Management Science, INFORMS, vol. 71(1), pages 219-239, January.
    • Handle: RePEc:inm:ormnsc:v:71:y:2025:i:1:p:219-239
    DOI: 10.1287/mnsc.2022.00359
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