Causes, consequences, and cures of myopic loss aversion: an experimental investigation

Arbeitspapier

We examine in an experiment the causes, consequences and possible cures of myopic loss aversion (MLA) for investment behaviour under risk. We find that both, investment horizons and feedback frequency contribute almost equally to the effects of MLA. Longer investment horizons and less frequent feedback lead to higher investments. However, when given the choice, subjects prefer on average shorter investment horizons and more frequent feedback. Exploiting the status quo bias by setting a long investment horizon or low feedback frequency as a default turns out to be a successful behavioural intervention that increases investment levels.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Jena Economic Research Papers ; No. 2008,004

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Information, Knowledge, and Uncertainty: General ; Portfolio Choice; Investment Decisions
• Subject: myopic loss aversion ; risk ; investment ; experiment ; Anlageverhalten ; Risikoaversion ; Test ; Informationsverhalten ; Equity Premium Puzzle ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fellner, Gerlinde ; Sutter, Matthias
• Event: Veröffentlichung
• (who): Friedrich Schiller University Jena and Max Planck Institute of Economics
• (where): Jena
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/25688
• Last update: 10.03.2025, 11:43 AM CET