TY - UNPB
T1 - Causes, consequences, and cures of myopic loss aversion - an experimental investigation
AU - Fellner, Gerlinde
AU - Sutter, Matthias
PY - 2008
Y1 - 2008
N2 - 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.
AB - 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.
U2 - 10.57938/5f186a69-05a2-423a-82b9-5e4d48ba54b9
DO - 10.57938/5f186a69-05a2-423a-82b9-5e4d48ba54b9
M3 - WU Working Paper and Case
T3 - Department of Economics Working Paper Series
BT - Causes, consequences, and cures of myopic loss aversion - an experimental investigation
PB - Inst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business
CY - Vienna
ER -