To buy or to sell: Cultural differences in stock market decisions based on price trends

Journal of Behavioral Decision Making

Volumn 21, Issue 4, 2008, Pages 399-413

  Ji, Li Jun ^a   Zhang, Zhiyong ^b   Guo, Tieyuan ^a  

^a QUEEN S UNIVERSITY   (Canada)

^b PEKING UNIVERSITY   (China)

Author keywords

Culture; Decisions; Lay theories of change; Stock prices

Indexed keywords

EID: 55549102652     PISSN: 08943257     EISSN: 10990771     Source Type: Journal    
DOI: 10.1002/bdm.595     Document Type: Article

References (30)

1. Brislin, R. W. (1970). Back-translation for cross-cultural research. Journal of Cross-Cultural Psychology, 1, 185-216.
2. Chen, G., Kim, K. A., Nofsinger, J. R., & Rui, O. M. (2007). Trading performance, disposition effect, overconfidence, representativeness bias, and experience of emerging market investors. Journal of Behavioral Decision Making. 20, 425-451.
3. Chui, A. C. W., Titman, S., & Wei, K. C. J. (2005). Individualism and Momentum around the World. AFA 2006 Boston Meetings (Paper Available at SSRN http://ssrn.com/abstract=685767).
4. De Bondt, W. (1993). Betting on trends: Intuitive forecasts of financial risk and return. International Journal of Forecasting, 9, 355-371.
5. De Bondt, W., & Thaler, R. (1985). Does the stock market overreact? Journal of Finance, 40, 793-805.
6. De Bondt, W., & Thaler, R. (1987). Further evidence on investor overreaction and stock market sensonality. Journal of Finance, 42, 557-581.
7. Epps, T. W. (1975). Security price changes and transaction volumes: Theory and evidence. American Economic Review, 65, 586-597.
8. Feng, L., & Seasholes, M. S. (2005). Do investor sophistication and trading experience eliminate behavioral biases in finance markets? Review of Finance, 9, 305-351.
9. Gilovich, T., Vallone, R., & Tversky, A. (1985). The hot hand in basketball: On the misperception of random sequences. Cognitive psychology, 17, 295-314.
10. Grinblatt, M., & Keloharju, M. (2001). What makes investors trade? The Journal of Finance, 56, 589-616.
11. Jegadeesh, N., & Titman, S. (1993). Returns to buying winners an dselling losers: Implications for stock market efficiency. Journal of Finance, 48, 65-91.
12. Jegadeesh, N., & Titman, S. (2002). Cross-sectional and time-series determinants of momentum returns. The Review of Financial Studies, 15, 143-157.
13. Ji, L. J. (2005). Culture and lay theories of change. In Richard M. Sorrentino, Dov. Cohen, Jim. Olson, & Mark. Zanna (Eds.), Culture and social behavior: The Tenth Ontario Symposium (117-135). Hillsdale, NJ: Lawrence Erlbaum.
14. Ji, L. J. (in press). The leopard cannot change his spots, or can he: Culture and the development of lay theories of change. Personality and Social Psychology Bulletin.
15. Ji, L. J., Guo, T., Messervey, D., & Zhang, Z. (2007). Looking beyond the present: Cultural differences in information processing. Unpublished manuscript, Queen's University (under revision).
16. Ji, L. J., Nisbett, R. E., & Su, Y. (2001). Culture, change, and prediction. Psychological Science, 12, 450-456.
17. Ji, L. J., Spina, R., Ross, M., & Zhang, Z. (2007). Why best can't last: Cultural differences in anticipating regression toward the mean. Unpublished manuscript, Queen's University (under review).
18. Karpoff, J. M. (1987). The relation between price changes and trading volume: A survey. Journal of Financial and Quantitative Analysis, 22, 109-126.
19. Malkiel, B. (1973). A random walk down Wall Street. New York: Norton.
20. Mussweiler, T., & Schneller, K. (2003). "What goes up must come down" - How charts influence decisions to buy and sell stocks. The Journal of Behavioral Finance, 4, 121-130.
21. Odean, T. (1998). Are investors reluctant to realize their losses? Journal of Finance, 53, 1775-1798.
22. Rouwenhorst, K. G. (1998). International momentum strategies. Journal of Finance, 53, 267-284.
23. Schachter, S., Hood, D., Gerin, W., Andreassen, P. B., & Rennert, M. (1985). Some causes and consequences of dependence and independence in the stock market. Journal of Economic Behavior and Organization, 6, 339-357.
24. Schachter, S., Ouellette, R., Whittle, B., & Gerin, W. (1987). Effects of trend and of profit or loss on the tendency to sell stock. Basic and Applied Social Psychology, 8, 259-271.
25. Shefrin, H. (2005). A behavioral approach to asset pricing. USA: Elsevier Academic Press.
26. Shefrin, H., & Statman, M. (1985). The disposition to sell winners to early and ride losers too long: Theory and evidence. Journal of Finance, 40, 777-790.
27. Shiller, R. J. (1989). Market volatility. Cambridge, MA: MIT Press.
28. Shumway, T., & Wu, G. (2005). Does Disposition Drive Momentum? AFA 2006 Boston Meetings Paper.
29. Statman, M., Thorley, S., & Vorkink, K. (2006). Investor overconfidence and trading volume. Review of Financial Studies, 19, 1531-1565.
30. Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science, 185, 1124-1131.