Showing papers by "Terrance Odean published in 2019"
TL;DR: The authors modify standard risky choice protocols by making participants earn their money at risk by completing manual tasks such as peeling potatoes, which leads to less risk-taking and to choices more consistent with those online survey respondents anticipate making with their own money.
Abstract: Experiments typically rely on small payments to incentivize participants This works if participants view these payments as fungible with their own money, but if participants view the payments as a windfall, they may behave differently in experiments than in real life We modify standard risky choice protocols by making participants earn their money at risk by completing manual tasks such as peeling potatoes This leads to less risk-taking and to choices more consistent with those online survey respondents anticipate making with their own money When realistic levels of risk aversion are important, experiments should require participants to earn their stakes
4 citations
TL;DR: This article showed that mutual fund managers' trading experiences bias their future repurchasing decisions, showing that a fund is 17% more likely to repurchase a stock when it previously sold the stock for a gain rather than for a loss.
Abstract: We show that mutual fund managers' trading experiences bias their future repurchasing decisions. Specifically, a fund is 17% more likely to repurchase a stock when it previously sold the stock for a gain rather than for a loss. Fund managers still prefer to repurchase stocks they sold for a gain at a past fund after they switch to another fund. Against the informed-trading hypothesis, the repurchasing bias harms fund performance: repurchased winners outperform funds trading these winners by over 6% per year between the sale and repurchase; repurchased losers significantly outperform funds after the repurchase while repurchased winners do not.
4 citations