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Positional concerns and framing effects in financial preferences

Author

Listed:
  • Assia Houfaf Khoufaf

    (ENSM - Ecole nationale supérieure de management - pôle universitaire Koléa - Ecole nationale supérieure de management - pôle universitaire Koléa)

  • Latifa Barbara

    (MDI Alger Business School)

  • Gilles G. Grolleau

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier, CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier, BSB - Burgundy School of Business (BSB) - Ecole Supérieure de Commerce de Dijon Bourgogne (ESC))

  • Assia Houfaf Khoufaf
  • Youcef Meriane

    (ENSM - Ecole nationale supérieure de management - pôle universitaire Koléa - Ecole nationale supérieure de management - pôle universitaire Koléa)

  • Naoufel Mzoughi

    (ECODEVELOPPEMENT - Unité de recherche d'Écodéveloppement - INRA - Institut National de la Recherche Agronomique)

Abstract

We examine the relevance of relative standings in the financial domain. We introduced innovative hypotheses by testing whether framing (gain versus loss, risk level, amounts versus percentage, and money origin) affects stated positional preferences. Based on a quasi-experimental survey in Algeria (North Africa), our results show that while egalitarian concerns are prevalent in financial preferences among participants, positional and absolute states are also selected by a significant proportion of respondents. We also found some support to the insight that positional preferences are affected by framing, since loss/gain and risk framings are found to be significant. In other words, the proportion of respondents having positional preferences was found to be significantly higher in the gain (respectively, risky) framing, compared to a symmetric loss (respectively, certain) situation.

Suggested Citation

  • Assia Houfaf Khoufaf & Latifa Barbara & Gilles G. Grolleau & Assia Houfaf Khoufaf & Youcef Meriane & Naoufel Mzoughi, 2018. "Positional concerns and framing effects in financial preferences," Post-Print hal-01992420, HAL.
    • Handle: RePEc:hal:journl:hal-01992420
    DOI: 10.1016/j.qref.2017.09.002
    Note: View the original document on HAL open archive server: https://institut-agro-montpellier.hal.science/hal-01992420v1
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    Cited by:

    1. Dib-Slamani, Hind & Grolleau, Gilles & Mzoughi, Naoufel, 2022. "Robbing a robber is not robbing," The Quarterly Review of Economics and Finance, Elsevier, vol. 85(C), pages 1-7.
    2. Fan, Wen & Zhang, Lifang, 2020. "Examining framing effect when subject's perspective matters: Evidence from China," Finance Research Letters, Elsevier, vol. 35(C).

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    JEL classification:

    • D0 - Microeconomics - - General
    • D1 - Microeconomics - - Household Behavior

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