IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/28730.html

Myopic Loss Aversion and Investment Decisions: from the Laboratory to the Field

Author

Listed:
  • Kazi Iqbal
  • Asadul Islam
  • John A. List
  • Vy Nguyen

Abstract

Whether, and to what extent, behavioral anomalies uncovered in the lab manifest themselves in the field remains of first order importance in finance and economics. We begin by examining behavior of retail traders/investors making investment decisions in constructed laboratory markets. Our results show that the behaviors of the traders are consistent with myopic loss aversion. We combine the lab results with a unique individual-level matched dataset on daily stock market transactions and portfolio positions over a two year period. We find that lab behaviors help to predict, but do not fully capture, the essential real-world trading analogs of retail traders.

Suggested Citation

  • Kazi Iqbal & Asadul Islam & John A. List & Vy Nguyen, 2021. "Myopic Loss Aversion and Investment Decisions: from the Laboratory to the Field," NBER Working Papers 28730, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28730
    Note: AP DEV PE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w28730.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Janussek, Maximilian, 2022. "Blessing or Curse? The Influence of Neobrokers on the Investment Behavior of Young Investors," Junior Management Science (JUMS), Junior Management Science e. V., vol. 7(5), pages 1375-1399.

    More about this item

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • N97 - Economic History - - Regional and Urban History - - - Africa; Oceania

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:28730. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.