Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/284284 
Year of Publication: 
2023
Series/Report no.: 
CeDEx Discussion Paper Series No. 2023-09
Publisher: 
The University of Nottingham, Centre for Decision Research and Experimental Economics (CeDEx), Nottingham
Abstract: 
The disposition effect is the reluctance to sell assets at a loss relative to a salient point of reference, typically assumed to be the purchase price. Using data on stocks and housing sales, we show that the peak price achieved by an asset during the investor's period of holding constitutes an additional salient reference point for asset owners that overlaps, and interacts, with the purchase price reference point. Peaks occurring before the investor purchased the asset do not affect future sales, indicating that ownership affects how investors form reference points.
Subjects: 
reference points
disposition effect
selling homes
investor behaviour
JEL: 
G40
G41
D14
Document Type: 
Working Paper

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