Work

Effects of price path shapes and decision frames on emotions and investment decisions: Experimental evidence

Year: 2024

Type: article

Abstract: We extend the literature on emotions and financial decisions by varying the agent (private investor, fund manager, delegation to a fund manager) in an investment experiment. We additionally vary the decision situation (buy or sell) and the shape of displayed price paths (convex, concave, or straight). We measure the investment behavior and the emotional valence evoked by the price paths. Independent of the type of agent, we confirm that price path shapes are related to investment behavior and emotions. In particular, concave shapes are associated with lower investments and valence. Finally, we provide evidence for a mediating role of valence.

Source: Journal of Behavioral Finance

DOI: 10.1080/15427560.2024.2413048

Authors: Henning Cordes, Philipp Decke, Sven Nolte, Judith C. Schneider

Institutions: Ernst Abbe University of Applied Sciences Jena, Leibniz University Hannover, Radboud University Nijmegen

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: hybrid

Funders: Deutsche Forschungsgemeinschaft, Radboud Universiteit

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