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Evaluation Periods and Asset Prices in a Market Experiment

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  • Gneezy, U.

    (Tilburg University, School of Economics and Management)

  • Kapteyn, A.

    (Tilburg University, School of Economics and Management)

  • Potters, J.J.M.

    (Tilburg University, School of Economics and Management)

Abstract

We test whether the frequency of feedback information about the performance of an investment portfolio and the flexibility with which the investor can change the portfolio influence her risk attitude in markets. In line with the prediction of myopic loss aversion (Benartzi and Thaler (1995)), we find that more information and more flexibility result in less risk taking. Market prices of risky assets are significantly higher if feedback frequency and decision flexibility are reduced. This result supports the findings from individual decision making, and shows that market interactions do not eliminate such behavior or its consequences for prices.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Gneezy, U. & Kapteyn, A. & Potters, J.J.M., 2002. "Evaluation Periods and Asset Prices in a Market Experiment," Other publications TiSEM 37824ad9-b4f0-472f-bde6-3, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:37824ad9-b4f0-472f-bde6-38de0cf9f5f6
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    References listed on IDEAS

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