Real-life investors’ memory recall bias: A lab-in-the-field experiment

King King Li and Kang Rong

Journal of Behavioral and Experimental Finance, 2023, vol. 37, issue C

Abstract: We conduct a lab-in-the field experiment to investigate the memory recall bias of real-life investors who are asked to recall their best performing stock (BPS) and worst performing stock (WPS). We have four main findings. First, investors are more likely to forget WPS than BPS. The proportion of investors who forget WPS and remember BPS is higher than that of those who forget BPS and remember WPS. Second, less experienced investors are more likely to forget WPS than more experienced investors. Third, present biased investors are more likely to forget WPS. Four, investors who pay more attention to stock prices are more likely to forget WPS. Overall, our findings suggest that investors exhibit motivated memory recall bias.

Keywords: Memory recall bias; Time preference; Attention; Behavioral finance; Experiment (search for similar items in EconPapers)
JEL-codes: C91 D03 D83 Z13 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:37:y:2023:i:c:s221463502200082x

DOI: 10.1016/j.jbef.2022.100760

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