Price Path Satisfaction with Buying Decisions
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2024-07-01
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en
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A study by Grosshans and Zeisberger (2017) demonstrate that investor satisfaction substantially depends on the price path by which the final return is achieved. A “Holding approach” is used in their experiment to test whether satisfaction levels and investment behaviour differ between price paths. This contrasts with real-world scenarios where investors typically purchase stocks. This study extends their findings by introducing a “Buying Approach”, which captures a more realistic perspective. Investigating whether investors report different satisfaction levels and trading behaviour when making their own buying decisions. Investors in the “Buying Approach” do not report significantly different satisfaction levels compared to the “Holding Approach”. Interestingly, investors in the “Buying Approach” have a significant higher propensity to sell their asset compared to the “Holding Approach”. Furthermore, this paper reports a smaller satisfaction gap and a higher propensity to sell, in contrast to Grosshans and Zeisberger (2017), who find a preference for holding stock.
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Faculteit der Managementwetenschappen