Why do investors sell losers ? How adaptation to losses affects future capitulation decisions

@inproceedings{Lee2008WhyDI,
  title={Why do investors sell losers ? How adaptation to losses affects future capitulation decisions},
  author={Carmen Lee and Roman Kraeussl and Andr{\'e} Lucas and Leonard J. Paas},
  year={2008}
}
  • Carmen Lee, Roman Kraeussl, +1 author Leonard J. Paas
  • Published 2008
According to disposition effect theory, people hold losing investments too long. However, many investors eventually sell at a loss, and little is known about which psychological factors contribute to these capitulation decisions. This study integrates prospect theory, utility maximization theory, and theory on reference point adaptation to argue that the… CONTINUE READING