Disposition Effect: A Review of Literature
Year: 2010
Type: preprint
Abstract: Behavioural Finance has emerged as a serious contender to the Efficient Markets Hypothesis in the study of asset pricing and capital markets. A major tenet on which it rests is the investor’s aversion to loss-induced regret and the consequent tendency to hold losing stocks too long and sell winners too soon. Shefrin and Statman (1985) called this ‘the Disposition Effect’. This paper surveys literature on the subject and creates a broad framework documenting evidence of the effect across various geographies, differential susceptibility among investor segments and the potential for creating abnormal returns using strategies based on the disposition effect.
Source: SSRN Electronic Journal
Author: Neeraj Amarnani
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2137958723