Letting Go of Your Losses: Experimental Evidence for Debiasing the Disposition Effect in Private Investment Decisions

Christoph Dobrich, Jutta Wollersheim, Matthias Sporrle and Isabell M. Welpe

Journal of Management and Strategy, 2014, vol. 5, issue 4, 1-13

Abstract: This study examines the impact of two different debiasing interventions on the emergence of the disposition effect in the investment decisions of private investors. By means of a fully crossed 2 x 2 between-participants online experiment (N = 223) and an established stock market simulation task, we examine the potential debiasing effects of rational warnings and emotional warnings on the emergence of the disposition effect. The disposition effect was successfully eliminated by both debiasing strategies. The simultaneous presence of both interventions did not increase the solitary effect of each of the two interventions.

Keywords: Investment decision; private investor; private stock trading; investment strategy; disposition effect; bias; decision-making; debiasing (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:jfr:jms111:v:5:y:2014:i:4:p:1-13

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