Logo Logo
Hilfe
Hilfe
Switch Language to English

Lucks, Konstantin E. (2016): The Impact of Self-Control on Investment Decisions. Münchener Wirtschaftswissenschaftliche Beiträge (VWL) 2016-9 [PDF, 720kB]

[thumbnail of Lucks_Self-ControlInvestment.pdf]
Vorschau
Download (720kB)

Abstract

This paper explores how reduced self-control affects individual investment behavior in two laboratory tasks. For this purpose, I exogenously reduce subjects’ self-control using a well-established psychological treatment. In each task, I find no significant main treatment effect, but secondary effects consistent with findings on self-control from other studies and self-control’s potential relevance in financial markets. In experiment 1, I find no significant change in the disposition effect following the manipulation. However, treated participants trade fewer different shares per round. In experiment 2, I look at the effect of self-control on myopic loss aversion by implementing a 2×2 design by varying investment horizon and self-control in a repeated lottery environment. Average behavior suggests that reduced self-control increases framing effects, but I cannot reject the null hypothesis of equal investment levels between the self-control treatments within each investment frame. Analyzing the dynamics of decision making in more detail, self-control depleted participants in the narrow frame reduce their investment levels on average over time which seems to be driven by more intense reactions to investment experiences.

Dokument bearbeiten Dokument bearbeiten