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The disposition effect and loss aversion: Do gender differences matter?

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  • Rau, Holger A.

Abstract

This paper analyzes gender differences in the disposition effect in an experiment based on Weber and Camerer (1998). The results emphasize that female investors realize less capital losses, have significantly higher disposition effects and are more loss averse than men.

Suggested Citation

  • Rau, Holger A., 2014. "The disposition effect and loss aversion: Do gender differences matter?," Economics Letters, Elsevier, vol. 123(1), pages 33-36.
  • Handle: RePEc:eee:ecolet:v:123:y:2014:i:1:p:33-36
    DOI: 10.1016/j.econlet.2014.01.020
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    References listed on IDEAS

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    1. Simon Gächter & Eric J. Johnson & Andreas Herrmann, 2022. "Individual-level loss aversion in riskless and risky choices," Theory and Decision, Springer, vol. 92(3), pages 599-624, April.
    2. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    3. Booth, Alison & Nolen, Patrick, 2012. "Salience, risky choices and gender," Economics Letters, Elsevier, vol. 117(2), pages 517-520.
    4. repec:bla:jfinan:v:53:y:1998:i:5:p:1775-1798 is not listed on IDEAS
    5. Rieger, Marc Oliver & Wang, Mei & Hens, Thorsten, 2011. "Prospect Theory around the World," Discussion Papers 2011/19, Norwegian School of Economics, Department of Business and Management Science.
    6. Shefrin, Hersh & Statman, Meir, 1985. "The Disposition to Sell Winners Too Early and Ride Losers Too Long: Theory and Evidence," Journal of Finance, American Finance Association, vol. 40(3), pages 777-790, July.
    7. Weber, Martin & Welfens, Frank, 2007. "An Individual Level Analysis of the Disposition Effect: Empirical and Experimental Evidence," Sonderforschungsbereich 504 Publications 07-45, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    8. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    9. Sutter, Matthias & Glätzle-Rützler, Daniela, 2010. "Gender Differences in Competition Emerge Early in Life," IZA Discussion Papers 5015, Institute of Labor Economics (IZA).
    10. Newton Da Costa & Carlos Mineto & Sergio Da Silva, 2008. "Disposition effect and gender," Applied Economics Letters, Taylor & Francis Journals, vol. 15(6), pages 411-416.
    11. Goulart, Marco & Da Costa Jr, Newton & Santos, Andre & Takase, Emilio & Da Silva, Sergio, 2013. "Psychophysiological correlates of the disposition effect," MPRA Paper 48227, University Library of Munich, Germany.
    12. Brad M. Barber & Terrance Odean, 2001. "Boys will be Boys: Gender, Overconfidence, and Common Stock Investment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 261-292.
    13. Weber, Martin & Camerer, Colin F., 1998. "The disposition effect in securities trading: an experimental analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 33(2), pages 167-184, January.
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    16. Schmidt, Ulrich & Traub, Stefan, 2002. "An Experimental Test of Loss Aversion," Journal of Risk and Uncertainty, Springer, vol. 25(3), pages 233-249, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Disposition effect; Experiment; Gender differences; Loss aversion;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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