Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/172513
Authors: 
Hermann, Daniel
Mußhoff, Oliver
Rau, Holger A.
Year of Publication: 
2017
Series/Report no.: 
Discussion Papers, Center for European, Governance and Economic Development Research 332
Abstract: 
The disposition effect is a well-established phenomenon which describes the behavior of investors that are more willing to sell capital gains than capital losses. In this article we present experimental evidence on a situation where an investor decides on behalf of another person. In our setting, trading effort should only be affected by investors' intrinsic motivation, as trading actions only influence the profits of a matched person. In a control treatment, trades directly influence investors' profits. Overall, we find that trading on behalf of others increases disposition effects. In this treatment, we find that the effect is caused by inexperienced investors, characterized by a greater concern for others. Thus, trading for others results in an emotional burden for these investors, which leads to weak trading performance.
Subjects: 
disposition effect
experiment
decisions on behalf of others
social value orientation
loss aversion
JEL: 
C91
D14
D81
G41
Document Type: 
Working Paper

Files in This Item:
File
Size
895.75 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.