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Title:Causes, consequences, and cures of myopic loss aversion: an experimental investigation PDF Logo
Authors:Fellner, Gerlinde
Sutter, Matthias
Issue Date:2008
Series/Report no.:Jena economic research papers 2008,004
Abstract: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.
Subjects:myopic loss aversion
risk
investment
experiment
JEL:C91
D80
G11
Document Type:Working Paper
Appears in Collections:Jena Economic Research Papers, MPI für Ökonomik

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