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Using Non-Invasive Brain Stimulation to Test the Role of Self-Control in Investor Behavior

Jianbiao Li, Xiaofei Niu (), Dahui Li and Qian Cao

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: We test whether self-control causally affects investor behavior with the non-invasive brain stimulation. Subjects trade stocks in an experimental asset market while their levels of self-control are exogenously varied by applying weak currents stimulation to a control-related brain area. We document that modulation of regional cortical excitability related to self-control significantly influences the propensity of realizing capital gains as well as capital losses. Our finding provides support for the role of self-control in the disposition effect and highlights the utility of using non-invasive brain stimulation to causally test the underlying mechanism of investor behavior.

Keywords: self-control; investor behavior; disposition effect; non-invasive brain stimulation (search for similar items in EconPapers)
JEL-codes: G02 G11 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-exp
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