The Connotation of Investment Behavior Rigidity and Its Relationship with Irrational Investment Behavior

DOI

10.2991/icedem-18.2018.111How to use a DOI?

Keywords

Investment behavior rigidity; Escalation of commitment; Disposition effect

Abstract

In order to study the mechanism of investment behavior rigidity, we examined the relationship between investment behavior rigidity and other irrational investment behavior, such as escalation of commitment and disposition effect. First, we developed an investment simulation system, manipulated five stocks' price during thirty-six periods to test investors' behavioral patterns in securities trading. Then, we investigated the relationship between investment behavior rigidity, escalation of commitment and disposition effect. The results summarized as follows: first, investors are exhibited disposition effect and escalation of commitment in securities trading; second, sex, education, duration of securities trading, and investment amount did not affect the disposition effect and escalation of commitment; and third, there is a positive correlation between investment behavior rigidity and escalation of commitment. The results of this paper support the validity of prospect theory in explaining the phenomenon of escalation of commitment and disposition effect.

Copyright

© 2018, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Kai Gao
AU  - Genbao Ji
PY  - 2018/12
DA  - 2018/12
TI  - The Connotation of Investment Behavior Rigidity and Its Relationship with Irrational Investment Behavior
BT  - Proceedings of the 2018 2nd International Conference on Economic Development and Education Management (ICEDEM 2018)
PB  - Atlantis Press
SP  - 447
EP  - 450
SN  - 2352-5398
UR  - https://doi.org/10.2991/icedem-18.2018.111
DO  - 10.2991/icedem-18.2018.111
ID  - Gao2018/12
ER  -