Causes, Consequences, and Cures of Myopic Loss Aversion - An Experimental Investigation

Gerlinde Fellner () and Matthias Sutter ()

Economic Journal, 2009, vol. 119, issue 537, pages 900-916

Abstract: We use an experiment to examine the causes, consequences and possible cures of myopic loss aversion (MLA) for investment behaviour under risk. We find that both investment horizons and feedback frequency contribute almost equally to the effects of MLA. Longer investment horizons and less frequent feedback lead to higher investments. However, when given the choice, subjects prefer on average shorter investment horizons and more frequent feedback. Exploiting the "status quo" bias by setting a long investment horizon or low feedback frequency as a default turns out to be a successful behavioural intervention to increase investment levels. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009.

Date: 2009

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Related works:
Working Paper: Causes, consequences, and cures of myopic loss aversion - An experimental investigation (2005)
Working Paper: Causes, consequences, and cures of myopic loss aversion - An experimental investigation (2008)
Working Paper: Causes, consequences, and cures of myopic loss aversion - An experimental investigation
Working Paper: Causes, consequences, and cures of myopic loss aversion - An experimental investigation (2005)
Working Paper: Causes, consequences, and cures of myopic loss aversion - An experimental investigation (2008)
Working Paper: Causes, consequences, and cures of myopic loss aversion - An experimental investigation (2005)
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