Hedging against embarrassment

Marco Goulart, Newton C.A. da Costa, Eduardo B. Andrade and Andre Santos ()

Journal of Economic Behavior & Organization, 2015, vol. 116, issue C, 310-318

Abstract: This paper assesses the extent to which the expected disclosure to peers of an individual investor's financial performance influences his/her stock-trading decisions. In a lab experiment, participants trade in incentivized stock market simulations, knowing that their financial performance will be either made public or kept private. The results show a significant increase in the disposition effect when financial performance is to be made public, resulting from a spike in the realization of gains. We conclude by suggesting that this phenomenon may be due to individuals’ strategic attempt to hedge against the embarrassment of ending the trading session at the bottom of the performance ranking.

Keywords: Disposition effect; Behavioral finance; Lab experiments; Self-conscious emotions (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268115001183
Full text for ScienceDirect subscribers only

Related works:
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:eee:jeborg:v:116:y:2015:i:c:p:310-318

DOI: 10.1016/j.jebo.2015.04.014

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().