IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

The effect of anticipated and experienced regret and pride on investors' future selling decisions

  • Lee, Carmen
  • Kräussl, Roman
  • Paas, Leo

This paper investigates the effect of anticipated/experienced regret and pride on individual investors' decisions to hold or sell a winning or losing investment, in the form of the disposition effect. As expected the results suggest that in the loss domain, low anticipated regret predicts a greater probability of selling a losing investment. While in the gain domain, high anticipated pride indicates a greater probability of selling a winning investment. The effects of high experienced regret/pride on the selling probability are found as well. An unexpected finding is that regret (pride) seems to be not only relevant for the loss (gain) domain, but also for the gain (loss) domain. In addition, this paper presents evidence of interconnectedness between anticipated and experienced emotions. The authors discuss the implications of these findings and possible avenues for further research.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://econstor.eu/bitstream/10419/71151/1/732525985.pdf
Download Restriction: no

Paper provided by Center for Financial Studies (CFS) in its series CFS Working Paper Series with number 2012/17.

as
in new window

Length:
Date of creation: 2012
Date of revision:
Handle: RePEc:zbw:cfswop:201217
Contact details of provider: Postal: House of Finance, Grüneburgplatz 1, HPF H5, D-60323 Frankfurt am Main
Phone: +49 (0)69 798-30050
Fax: +49 (0)69 798-30077
Web page: http://www.ifk-cfs.de/
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
  2. Maria J. Louro & Rik Pieters & Marcel Zeelenberg, 2005. "Negative Returns on Positive Emotions: The Influence of Pride and Self-Regulatory Goals on Repurchase Decisions," Journal of Consumer Research, University of Chicago Press, vol. 31(4), pages 833-840, 03.
  3. Simonson, Itamar, 1992. " The Influence of Anticipating Regret and Responsibility on Purchase Decisions," Journal of Consumer Research, University of Chicago Press, vol. 19(1), pages 105-18, June.
  4. Reb, Jochen, 2008. "Regret aversion and decision process quality: Effects of regret salience on decision process carefulness," Organizational Behavior and Human Decision Processes, Elsevier, vol. 105(2), pages 169-182, March.
  5. Tsiros, Michael & Mittal, Vikas, 2000. " Regret: A Model of Its Antecedents and Consequences in Consumer Decision Making," Journal of Consumer Research, University of Chicago Press, vol. 26(4), pages 401-17, March.
  6. Louro, M.J.S. & Pieters, R. & Zeelenberg, M., 2005. "Negative returns on positive emotions : The influence of pride and self-regulatory goals on repurchase decisions," Other publications TiSEM 014beb9b-0df4-47a7-8c79-1, Tilburg University, School of Economics and Management.
  7. Shefrin, Hersh & Statman, Meir, 1985. " The Disposition to Sell Winners Too Early and Ride Losers Too Long: Theory and Evidence," Journal of Finance, American Finance Association, vol. 40(3), pages 777-90, July.
  8. S. Hart & A. Mas-Collel, 2010. "A Simple Adaptive Procedure Leading to Correlated Equilibrium," Levine's Working Paper Archive 572, David K. Levine.
  9. Weber, Martin & Camerer, Colin F., 1998. "The disposition effect in securities trading: an experimental analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 33(2), pages 167-184, January.
  10. Ratner, Rebecca K. & Herbst, Kenneth C., 2005. "When good decisions have bad outcomes: The impact of affect on switching behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 96(1), pages 23-37, January.
  11. Zeelenberg, Marcel & Pieters, Rik, 2004. "Beyond valence in customer dissatisfaction: A review and new findings on behavioral responses to regret and disappointment in failed services," Journal of Business Research, Elsevier, vol. 57(4), pages 445-455, April.
  12. Westbrook, Robert A & Oliver, Richard L, 1991. " The Dimensionality of Consumption Emotion Patterns and Consumer Satisfaction," Journal of Consumer Research, University of Chicago Press, vol. 18(1), pages 84-91, June.
  13. Zeelenberg, M. & Pieters, R., 2004. "Beyond valence in customer dissatisfaction : A review and new findings on behavioral responses to regret and disappointment in failed services," Other publications TiSEM 7bfb4aa9-cba7-4786-850d-1, Tilburg University, School of Economics and Management.
  14. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March.
  15. Zeelenberg, M. & van Dijk, E. & van den Bos, K. & Pieters, R., 2002. "The Inaction Effect in the Psychology of Regret," Other publications TiSEM a29106c0-2319-4f60-b213-8, Tilburg University, School of Economics and Management.
  16. Summers, Barbara & Duxbury, Darren, 2012. "Decision-dependent emotions and behavioral anomalies," Organizational Behavior and Human Decision Processes, Elsevier, vol. 118(2), pages 226-238.
  17. Cooke, Alan D J & Meyvis, Tom & Schwartz, Alan, 2001. " Avoiding Future Regret in Purchase-Timing Decisions," Journal of Consumer Research, University of Chicago Press, vol. 27(4), pages 447-59, March.
  18. Simonson, Itamar, 1989. " Choice Based on Reasons: The Case of Attraction and Compromise Effects," Journal of Consumer Research, University of Chicago Press, vol. 16(2), pages 158-74, September.
  19. Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 92(368), pages 805-24, December.
  20. Terrance Odean, 1998. "Are Investors Reluctant to Realize Their Losses?," Journal of Finance, American Finance Association, vol. 53(5), pages 1775-1798, October.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:zbw:cfswop:201217. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.