Oehler, A., Wendt, S., Wedlich, F., Horn, M., 2018, Investors’ Personality Influences Investment Decisions: Experimental Evidence on Extraversion and Neuroticism, Journal of Behavioral Finance 19, 30-48.
Abstract
The authors analyze the impact of individuals’ degree of extraversion and neuroticism on their decision making in an experimental asset market. To establish this link between research on experimental asset markets and social psychology the authors use a unique approach that combines a questionnaire designed to assess individuals’ degree of extraversion and neuroticism and an experimental asset market to assess individual financial decision making. The dataset combines 364 undergraduate business students’ questionnaire responses and their trading behavior in the asset market. The authors find that extraversion and neuroticism significantly influence individuals’ behavior in the experimental asset market. Specifically, more extraverted individuals pay higher prices for financial assets and they buy more financial assets when assets are overpriced than less extraverted individuals do. More neurotic individuals hold less risky assets in their financial portfolios than less neurotic individuals do. Although a large part of the explanatory power appears to be driven by gender differences, the authors still find significant impact of extraversion and neuroticism after controlling for gender effects. The study findings suggest that further research on financial markets could benefit from including personality of market participants as a crucial explanatory factor..
Keywords
Investor personality, Investment behavior, Decision making, Behavioral finance, Experimental asset markets
JEL Classifications
G02, G11, C91
Zuvor:
Oehler, A., Wendt, S., Wedlich, F., Horn, M., 2017, Investors’ Personality Influences Investment Decisions: Experimental Evidence on Extraversion and Neuroticism; Research in Behavioral Finance Conference 2016, September 15-16; 2016 Behavioural Finance Working Group Conference, June 13-14, 2016; 52nd Meeting of the Eastern Finance Association (EFA), April 6-9, 2016.
Auch:
Oehler, A., Horn, M., Wendt, S., 2021, Information Illusion? Placebic Information and Stock Price Forecasts; AEA American Economic Association Annual Meeting 2021, January 3-5.
Oehler, A., Horn, M., Wendt, S., 2020, Information Illusion: Placebic Information and Stock Price Estimates; Jahrestagung 2020 Verein für Socialpolitik, September 27-30; 28th Global Conference on Business and Finance, January 6-8.
Oehler, A., Horn, M., Wendt, S., 2019, Information Illusion: Placebic Information and Stock Price Estimates; 2019 Society for Judgment and Decision Making Conference, November 15-18; Psychonomic Society 2019 Annual Meeting, November 14-17; 88th International Atlantic Economic Conference, October 17-20; 2019 Annual Meeting Academy of Financial Services, October 15-16; IAREP/SABE Conference, September 1-4; Behavioural Finance Working Group Conference, June 6-7.
