Good Reasons Sell: Reason-Based Choice Among Group and Individual Investors in the Stock Market

Brad Barber, Chip Heath () and Terrance Odean
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Chip Heath: Graduate School of Business, Stanford University, Stanford, California 94305

Management Science, 2003, vol. 49, issue 12, 1636-1652

Abstract: In this paper, we compare the investment decisions of groups (stock clubs) and individuals. Both individuals and clubs are more likely to purchase stocks that are associated with good reasons (e.g., a company that is featured on a list of most-admired companies). However, stock clubs favor such stocks more than individuals, despite the fact that such reasons do not improve performance. We describe why social dynamics may make good reasons more important for groups than individuals.

Keywords: Reason-Based, Choice; , Group Decision, Making; , Group Polarization (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:49:y:2003:i:12:p:1636-1652

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