Framing and the disposition effect in a scopic regime

L.M. Liêu and M. Pelster

The Quarterly Review of Economics and Finance, 2020, vol. 78, issue C, 175-185

Abstract: This paper studies the influence of framing on the relationship between trading in a transparent trading environment (a “scopic regime”) and the disposition effect. In principle, the recent literature agrees that social interactions alter investors’ disposition effect. However, while some studies argue the disposition effect increases in a social environment, others provide evidence that the disposition effect decreases under a scopic regime. We show that the framing of the decision problem on social trading platforms affects the sign on this relationship, and thereby synthesize the existing findings. Individuals alter their behavior to optimize their social image under the given framing.

Keywords: Social interactions; Scopic regime; Online trading; Disposition effect (search for similar items in EconPapers)
JEL-codes: D14 G11 G23 G24 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:78:y:2020:i:c:p:175-185

DOI: 10.1016/j.qref.2020.01.008

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