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The Effect of Prior Investment Outcomes on Future Investment Decisions: Is There a Gender Difference?

Author

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  • Ann Marie Hibbert
  • Edward R Lawrence
  • Arun J Prakash

Abstract

We use our survey of finance professors from universities across the USA to investigate whether men and women react differently to prior gains and losses. We find that after incurring a loss, a large fraction of men continue to invest in stocks, but a majority of women tend to avoid investing in stocks. Even though prior losses increase the expectation of unfavorable market conditions, we find that women are more likely than men to expect unfavorable market conditions irrespective of whether they have made a gain or a loss in their prior stock market investments.

Suggested Citation

  • Ann Marie Hibbert & Edward R Lawrence & Arun J Prakash, 2018. "The Effect of Prior Investment Outcomes on Future Investment Decisions: Is There a Gender Difference?," Review of Finance, European Finance Association, vol. 22(3), pages 1195-1212.
    • Handle: RePEc:oup:revfin:v:22:y:2018:i:3:p:1195-1212.
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    File URL: http://hdl.handle.net/10.1093/rof/rfw060
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    Citations

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    Cited by:

    1. repec:zbw:bofitp:2022_011 is not listed on IDEAS
    2. Gu, Pu, 2020. "The effects of social bias against female analysts on markets," Journal of Corporate Finance, Elsevier, vol. 64(C).
    3. Davydov, Denis & Garanina, Tatiana & Weill, Laurent, 2022. "Managing bank liquidity hoarding during uncertain times : The role of board gender diversity," BOFIT Discussion Papers 11/2022, Bank of Finland, Institute for Economies in Transition.
    4. Pallavi Dogra & Arun Kaushal & Prateek Kalia, 2024. "What drives the investment intentions of emerging economy millennials? Examining the effect of financial advertisement with the PLS-SEM," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(2), pages 276-291, June.
    5. Davydov, Denis & Garanina, Tatiana & Weill, Laurent, 2022. "Managing bank liquidity hoarding during uncertain times: The role of board gender diversity," BOFIT Discussion Papers 11/2022, Bank of Finland Institute for Emerging Economies (BOFIT).
    6. Mohammad Tariqul Islam Khan, 2022. "Prior perceived losses and investment objectives after stock market crisis: a moderated-mediation model of risk tolerance and loss aversion," SN Business & Economics, Springer, vol. 2(7), pages 1-22, July.
    7. Palvia, Ajay & Vähämaa, Emilia & Vähämaa, Sami, 2020. "Female leadership and bank risk-taking: Evidence from the effects of real estate shocks on bank lending performance and default risk," Journal of Business Research, Elsevier, vol. 117(C), pages 897-909.

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