Potential drivers of the disposition effect

Last registered on May 27, 2021

Pre-Trial

Trial Information

General Information

Title
Potential drivers of the disposition effect
RCT ID
AEARCTR-0005592
Initial registration date
March 24, 2020

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
March 24, 2020, 10:55 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
May 27, 2021, 7:36 AM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Region

Primary Investigator

Affiliation
Radboud University

Other Primary Investigator(s)

PI Affiliation
Radboud University
PI Affiliation
Tilburg University
PI Affiliation

Additional Trial Information

Status
In development
Start date
2020-03-24
End date
2021-12-31
Secondary IDs
Abstract
Investors have the irrational disposition to sell assets that have gained value too early and keep assets that have lost value too long. This well documented disposition effect (Shefrin & Statman 1985) plays a prominent role in the behavioral finance- and in the behavioral economics literature (Andreassen 1988; Weber & Camerer 1998; Gneezy 2005). The aim of this project is to investigate the relative importance of three potential drivers of the disposition effect (risk attitudes, ambiguity attitudes, beliefs) and to compare finance professionals with non-professionals in a controlled experiment.
External Link(s)

Registration Citation

Citation
de Boeck, Georges et al. 2021. "Potential drivers of the disposition effect." AEA RCT Registry. May 27. https://doi.org/10.1257/rct.5592-2.0
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2020-03-29
Intervention End Date
2020-12-31

Primary Outcomes

Primary Outcomes (end points)
After receiving the signal regarding the development of the asset, we elicit i) the matching probability of the asset going up or down in the next round, ii) the certainty equivalent of the asset and iii) the wts of the asset. Hence, for each individual we have 4 observations (2x probability match +1x ce+1x wts) in two scenarios (asset goes up or down), for a total of 8 observations per treatment.

We expect:
1. to observe the disposition effect (willing to sell for expected value for gains, not willing to sell for expected value for losses)
2. non-Bayesian beliefs, in the direction predicted by conservatism.
3. risk attitudes depending on the domain and related to the disposition effect.
4. weak effect of ambiguity attitude on the disposition effect.
5. significant differences between financial professionals and non-professionals
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Between subjects design. Lab-in-the-Field experiment.
Experimental Design Details
See intervention.
Randomization Method
Software
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
minimum 100 individual professionals, and 100 individual students, perhaps more depending on budget and availability. Treatment 1: N=100 (50 professionals, 50 students), Treatment 2: N=100 (50 professionals, 50 students)
Sample size: planned number of observations
minimum 100 individual professionals, and 100 individual students, perhaps more depending on budget and availability. Treatment 1: N=100 (50 professionals, 50 students), Treatment 2: N=100 (50 professionals, 50 students)
Sample size (or number of clusters) by treatment arms
Treatment 1: N=100 (50 professionals, 50 students), Treatment 2: N=100 (50 professionals, 50 students)
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
Research Ethical Review Board of the School of Business and Economics, Vrije Universiteit Amsterdam
IRB Approval Date
2020-03-20
IRB Approval Number

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials