Do Professional Traders Exhibit Myopic Loss Aversion? An Experimental Analysis
Michael S. Haigh and
John List
Journal of Finance, 2005, vol. 60, issue 1, 523-534
Abstract:
Two behavioral concepts, loss aversion and mental accounting, have been combined to provide a theoretical explanation of the equity premium puzzle. Recent experimental evidence supports the theory, as students' behavior has been found to be consistent with myopic loss aversion (MLA). Yet, much like certain anomalies in the realm of riskless decision‐making, these behavioral tendencies may be attenuated among professionals. Using traders recruited from the CBOT, we do indeed find behavioral differences between professionals and students, but rather than discovering that the anomaly is muted, we find that traders exhibit behavior consistent with MLA to a greater extent than students.
Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (389)
Downloads: (external link)
https://doi.org/10.1111/j.1540-6261.2005.00737.x
Related works:
Working Paper: Do professional traders exhibit myopic loss aversion? An experimental analysis (2005) 
Working Paper: DO PROFESSIONAL TRADERS EXHIBIT MYOPIC LOSS AVERSION? AN EXPERIMENTAL ANALYSIS (2002) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:bla:jfinan:v:60:y:2005:i:1:p:523-534
Ordering information: This journal article can be ordered from
http://www.afajof.org/membership/join.asp
Access Statistics for this article
More articles in Journal of Finance from American Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().