Name-Based Behavioral Biases: Are Expert Investors Immune?

Jennifer Itzkowitz and Jesse Itzkowitz

Journal of Behavioral Finance, 2017, vol. 18, issue 2, 180-188

Abstract: The market comprises investors with a broad range of expertise. As a result, investors may make decisions differently from one another. Research reveals that investors use name-based heuristics, or short-cuts, including alphabetical ordering (Itzkowitz, Itzkowitz, and Rothbort [2015]), name fluency (Anderson and Larkin [2012], Green and Jame [2013]), and name memorability (Grullon, Kanatas, and Weston [2004]) when trading stocks, resulting in irrational decisions. Because experts and novices process information differently, name-based biases may not affect all investors equally. The authors test and confirm the hypothesis that, compared to novices, expert investors are relatively immune to name-based biases.

Date: 2017
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DOI: 10.1080/15427560.2017.1308940

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