The Realization Effect: Risk-Taking after Realized versus Paper Losses

• 成果类型: Article
• 署名作者: Imas, Alex
• 署名单位: Carnegie Mellon University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20140386
• 发表日期: 2016
• 页码: 2086-2109
• 关键词: myopic loss aversion; expected-utility-theory; prospect-theory; portfolio choice; preferences; disposition; COMMITMENT; experience; DECISION; BEHAVIOR

摘要

Understanding how prior outcomes affect risk attitudes is critical for the study of choice under uncertainty. A large literature documents the significant influence of prior losses on risk attitudes. The findings appear contradictory: some studies find greater risk-taking after a loss, whereas others show the opposite-that people take on less risk. I reconcile these seemingly inconsistent findings by distinguishing between realized versus paper losses. Using new and existing data, I replicate prior findings and demonstrate that following a realized loss, individuals avoid risk; if the same loss is not realized, a paper loss, individuals take on greater risk.