English, Article, Journal or magazine article edition: The Repurchase Behavior of Individual Investors: An Experimental Investigation Weber, Martin; Welfens, Frank

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Bookmark: http://trove.nla.gov.au/version/42841
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • The Repurchase Behavior of Individual Investors: An Experimental Investigation
Author
  • Weber, Martin
  • Welfens, Frank
Physical Description
  • preprint
Notes
  • We analyze two recently documented follow-on purchase and repurchase patterns experimentally: Individual investors’ preference for purchasing additional shares of a stock that decreased rather than increased in value succeeding an initial purchase (pattern 1) and investors’ tendency for purchasing stocks that they previously sold at a higher price (pattern 2). Similar to the field data study by Odean, Strahilevitz, and Barber (2004), subjects in our experiment are about 2.5 to 3 times as likely to purchase units of a single fictitious good if the price of the good declined following a purchase or sale in the previous period. As an assignment of choices clearly reduces the effect, we ar-gue that investors are involved in counterfactual thinking: They refrain from purchasing additional shares or repurchasing shares at a higher price because doing so means admitting to their ex post wrong decision.
  • RePEc:xrs:sfbmaa:07-44
Language
  • English
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