Decision-dependent emotions and behavioral anomalies

Organizational Behavior and Human Decision Processes

Volumn 118, Issue 2, 2012, Pages 226-238

  Summers, Barbara ^a   Duxbury, Darren ^a  

^a UNIVERSITY OF LEEDS   (United Kingdom)

Author keywords

Behavioral anomalies; Disappointment; Disposition effect; Elation; Emotions; Regret; Rejoicing

Indexed keywords

EID: 84861005771     PISSN: 07495978     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.obhdp.2012.03.004     Document Type: Article

References (75)

1. Barberis N., Xiong W. What drives the disposition effect? An analysis of a long-standing preference-based explanation. Journal of Finance 2009, 64(2):751-784.
2. Barberis N., Xiong W. Realization utility. Journal of Financial Economics 2012, 104:251-271.
3. Bell D.E. Regret in decision making under uncertainty. Operations Research 1982, 30(5):961-981.
4. Bell D.E. Disappointment in decision making under uncertainty. Operations Research 1985, 33(1):1-27.
5. Boyce R.R., Brown T.C., McClelland G.H., Peterson G.L., Schulze W.D. An experimental examination of intrinsic values as a source of the WTA-WTP disparity. The American Economic Review 1992, 82(5):1366-1373.
6. Cavanaugh L.A., Bettman J.R., Luce M.F., Payne J.W. Appraising the appraisal tendency framework. Journal of Consumer Psychology 2007, 17(3):169-173.
7. Chui P.M.W. An experimental study of the disposition effect: Evidence from Macau. Journal of Psychology and Financial Markets 2001, 2(4):215-221.
8. Cioffi D., Garner R. On doing the decision: Effects of active versus passive choice on commitment and self perception. Personality and Social Psychology Bulletin 1996, 22(2):133-147.
9. Connolly T., Butler D. Regret in economic and psychological theories of choice. Journal of Behavioral Decision Making 2006, 19(2):139-154.
10. Constantinides G.M. Capital market equilibrium with personal tax. Econometrica 1983, 51(3):611-636.
11. Coval J.D., Shumway T. Do behavioral biases affect prices?. Journal of Finance 2005, 60(1):1-34.
12. Dhar R., Zhu N. Up close and personal: Investor sophistication and the disposition effect. Management Science 2006, 52(5):726-740.
13. Dunn J.R., Schweitzer M.E. Feeling and believing: The influence of emotion on trust. Journal of Personality and Social Psychology 2005, 88:736-748.
14. Duxbury D., Hudson R., Keasey K., Summers B. Should actions speak louder than words? Individuals' attitudes and behavior in asset allocation choices. Economics Letters 2005, 89(1):107-111.
15. Fogel S.O., Berry T. The disposition effect and individual investor decisions: The roles of regret and counterfactual alternatives. The Journal of Behavioral Finance 2006, 7(2):107-116.
16. Frijda N.H., Kuipers P., ter Schure E. Relations among emotion, appraisal, and emotional action readiness. Journal of Personality and Social Psychology 1989, 57(2):212-228.
17. Gächter, S., Johnson, E.J., & Herrmann, A. (2010). Individual-Level Loss Aversion in Riskless and Risky Choices. CeDEx Discussion Paper No. 2010-20, University of Nottingham.
18. Garvey R., Murphy A. Are professional traders too slow to realise their losses?. Financial Analysts Journal 2004, 60(4):35-43.
19. Genesove D., Mayer C. Loss aversion and seller behavior: Evidence from the housing market. Quarterly Journal of Economics 2001, 116:1233-1260.
20. Gilovich T., Medvec V.H. The experience of regret: What, when, and why. Psychological Review 1995, 102(2):379-395.
21. Grinblatt M., Keloharju M. What makes investors trade?. Journal of Finance 2001, 56(2):589-616.
22. Han S., Lerner J.S., Keltner D. Feelings and consumer decision making: The appraisal-tendency framework. Journal of Consumer Psychology 2007, 17(3):158-168.
23. Harris C.C., Brown G. Gain, loss and personal responsibility: The role of motivation in resource valuation decision-making. Ecological Economics 1992, 5:73-92.
24. Hens T., Vlcek M. Does prospect theory explain the disposition effect?. Journal of Behavioral Finance 2011, 12(3):141-157.
25. Hsee C.K., Rottenstreich Y. Music, pandas, and muggers: On the affective psychology of value. Journal of Experimental Psychology: General 2004, 133(1):23-30.
26. Irwin J.R. Buying/selling price preference reversals: Preference for environmental changes in buying versus selling modes. Organizational Behavior and Human Decision Processes 1994, 60:431-457.
27. Irwin J., McClelland G., McKee M., Schulze W.D., Norden E. Payoff dominance vs. cognitive transparency in decision making. Economic Inquiry 1998, 36:272-285.
28. Ivković Z., Poterba J., Weisbenner S. Tax-motivated trading by individual investors. The American Economic Review 2005, 95(5):1605-1630.
29. Jin L., Scherbina A. Inheriting losers. The Review of Financial Studies 2011, 24(3):786-820.
30. Jordan D., Diltz J.D. Day traders and the disposition effect. Journal of Behavioral Finance 2004, 5(4):192-200.
31. Kahneman D., Knetsch J.L., Thaler R.H. Experimental tests of the endowment effect and the Coase theorem. The Journal of Political Economy 1990, 98(6):1325-1348.
32. Kahneman D., Tversky A. Prospect theory: An analysis of decision under risk. Econometrica 1979, 47(2):263-291.
33. Kahneman D., Tversky A. The psychology of preferences. Scientific American 1982, 246(1):160-173.
34. Kaustia M. Prospect theory and the disposition effect. Journal of Financial and Quantitative Analysis 2010, 45:791-812.
35. Keltner D., Locke K.D., Audrain P. The influence of attributions on the relevance of negative feelings to personal satisfaction. Personality and Social Psychology Bulletin 1993, 19:21-29.
36. Knetsch J.L. The endowment effect and evidence of nonreversible indifference curves. The American Economic Review 1989, 79(5):1277-1284.
37. Knetsch J.L., Sinden J.A. Willingness to pay and compensation demanded: Experimental evidence of an unexpected disparity in measures of value. Quarterly Journal of Economics 1984, 99(3):507-521.
38. Knetsch J.L., Sinden J.A. The persistence of evaluation disparities. Quarterly Journal of Economics 1987, 102(3):691-695.
39. Ku G. Before escalation: Behavioral and affective forecasting in escalation of commitment. Personality and Social Psychology Bulletin 2008, 34:1477-1491.
40. Ku G. Learning to de-escalate: The effects of regret in escalation of commitment. Organizational Behavior and Human Decision Processes 2008, 105:221-232.
41. Lakonishok J., Smidt S. Volumes for winners and losers: Taxation and other motives for stock trading. The Journal of Finance 1986, 41(4):951-974.
42. Landman J. Regret and elation following action and inaction: Affective responses to positive versus negative outcomes. Personality and Social Psychology Bulletin 1987, 13(4):524-536.
43. Larsen R.J., Fredrickson B.L. Measurement issues in emotion research. Well-being: Foundations of hedonic psychology 1999, 40-60. Russell Sage, New York. D. Kahnemen, E. Diener, N. Schwarz (Eds.).
44. Lehenkari M. In search of the underlying mechanism of the disposition effect. Journal of Behavioral Decision Making 2012, 25(2):196-209.
45. Lehenkari M., Perttunen J. Holding on to the losers: Finnish evidence. Journal of Behavioral Finance 2004, 5(2):116-126.
46. Lerner J.S., Keltner D. Beyond valence: Toward a model of emotion-specific influences on judgement and choice. Cognition & Emotion 2000, 14(4):473-493.
47. Lerner J.S., Keltner D. Fear, anger, and risk. Journal of Personality and Social Psychology 2001, 81(1):146-159.
48. Lerner J.S., Small D.A., Loewenstein G. Heart strings and purse strings: Carryover effects of emotions on economic decisions. Psychological Science 2004, 15(5):337-341.
49. Loomes G., Sugden R. Regret theory: An alternative theory of rational choice under uncertainty. Economic Journal 1982, 92(368):805-824.
50. Loomes G., Sugden R. Disappointment and dynamic consistency in choice under uncertainty. The Review of Economic Studies 1986, 53(2):271-282.
51. Mellers B., Schwartz A., Ritov I. Emotion-based choice. Journal of Experimental Psychology: General 1999, 128(3):332-345.
52. Odean T. Are investors reluctant to realize their losses?. Journal of Finance 1998, 53(5):1775-1798.
53. Oehler, A., Heilmann, K., Läger, V., & Oberländer, M. (2002). Dying out or dying hard? Disposition investors in stock markets. http://dx.doi.org/10.2139/ssrn.314139.
54. Peters E., Slovic P., Gregory R. The role of affect in the WTA/WTP disparity. Journal of Behavioral Decision Making 2003, 16:309-330.
55. Rottenstreich Y., Hsee C.K. Money, kisses and electric shocks: On the affective psychology of risk. Psychological Science 2001, 12(3):185-190.
56. Samuelson W., Zeckhauser R. Status quo bias in decision making. Journal of Risk and Uncertainty 1988, 1(1):7-59.
57. Sandberg T., Conner M. A mere measurement effect for anticipated regret: Impacts on cervical screening attendance. British Journal of Social Psychology 2009, 48:221-236.
58. Sayman S., öncüler A. Effects of study design characteristics on the WTA-WTP disparity: A meta-analytical framework. Journal of Economic Psychology 2005, 26:289-312.
59. Shapira Z., Venezia I. Patterns of behavior of professionally managed and independent investors. Journal of Banking and Finance 2001, 25(8):1573-1587.
60. Shefrin H. How the disposition effect and momentum impact investment professionals. The Journal of Investment Consulting 2007, 8(2):68-79.
61. Shefrin H., Statman M. The disposition to sell winners too early and ride losers too long: Theory and evidence. Journal of Finance 1985, 40(3):777-790.
62. Shefrin H., Statman M. How not to make money in the stock market. Psychology Today 1986, 20(2):53-57.
63. Statman M. What investors really want 2011, McGraw-Hill.
64. Strahilevitz M., Odean T., Barber B. Once burned, twice shy: How naïve learning, counterfactuals, and regret affect the repurchase of stocks previously sold. Journal of Marketing Research 2011, 48(Suppl. 1):S102-S120.
65. Thaler R.H. Mental accounting and consumer choice. Marketing Science 1985, 4(3):199-214.
66. Thaler R.H. Mental accounting matters. Journal of Behavioral Decision Making 1999, 12(3):183-206.
67. Tsai M-H., Young M.J. Anger, fear, and escalation of commitment. Cognition & Emotion 2010, 24(6):962-973.
68. Weber M., Camerer C.F. The disposition effect in securities trading: An experimental analysis. Journal of Economic Behavior and Organization 1998, 33(2):167-184.
69. Weber E., Johnson E.J. Mindful judgment and decision making. Annual Review of Psychology 2009, 60:53-85.
70. Weber M., Zuchel H. How do prior outcomes affect risk attitude? Comparing escalation of commitment and the house-money effect. Decision Analysis 2005, 2(1):30-43.
71. Wong K.F.E., Kwong J.Y.Y. The role of anticipated regret in escalation of commitment. Journal of Applied Psychology 2007, 92:545-554.
72. Zeelenberg M., van Dijk W.W., Manstead A.S.R. Reconsidering the relation between regret and responsibility. Organizational Behavior and Human Decision Processes 1998, 74(3):254-272.
73. Zeelenberg M., van Dijk W.W., Manstead A.S.R. Regret and responsibility resolved? Evaluating Ordóñez and Connolly's (2000) conclusions. Organizational Behavior and Human Decision Processes 2000, 81(1):143-154.
74. Zeelenberg M., van Dijk W.W., Manstead A.S.R., van der Pligt J. The experience of regret and disappointment. Cognition & Emotion 1998, 12(2):221-230.
75. Zeelenberg M., van Dijk W.W., Manstead A.S.R., van der Pligt J. On bad decisions and disconfirmed expectancies: The psychology of regret and disappointment. Cognition & Emotion 2000, 14(4):521-541.