scholarly journals The Impact of Asset Purchases in an Experimental Market with Consumption Smoothing Motives

2021 ◽  
Author(s):  
Jieyi Duan ◽  
Nobuyuki Hanaki
Keyword(s):  
Consumption Smoothing ◽  
Experimental Market ◽  
Asset Purchases ◽  
The Impact

A study of prominence for disposition effect: a systematic review

2019 ◽  
Vol 11 (1) ◽  
pp. 2-21 ◽  
Author(s):  
Syed Aliya Zahera ◽  
Rohit Bansal
Keyword(s):  
Mutual Funds ◽  
Behavioral Finance ◽  
Mutual Fund ◽  
Institutional Investors ◽  
Disposition Effect ◽  
Individual Investors ◽  
Content Type ◽  
Experimental Market ◽  
The Individual ◽  
The Impact

Purpose The purpose of this paper is to study the disposition effect that is exhibited by the investors through the review of research articles in the area of behavioral finance. When the investors are hesitant to realize the losses and quick to realize the gains, this phenomenon is known as the disposition effect. This paper explains various theories, which have been evolved over the years that has explained the phenomenon of disposition effect. It includes the behavior of individual investors, institutional investors and mutual fund managers. Design/methodology/approach The authors have used the existing literatures from the various authors, who have studied the disposition effect in either real market or the experimental market. This paper includes literature over a period of 40 years, that is, Dyl, 1977, in the form of tax loss selling, to the most recent paper, Surya et al. (2017). Some authors have used the PGR-PLR ratio for calculating the disposition effect in their study. However, some authors have used t-test, ANNOVA, Correlation coefficient, Standard deviation, Regression, etc., as a tool to find the presence of disposition effect. Findings The effect of disposition can be changed for different types of individual investors, institutional investors and mutual funds. The individual investors are largely prone to the disposition effect and the demographic variables like age, gender, experience, investor sophistication also impact the occurrence of the disposition effect. On the other side, the institutional investors and mutual funds managers may or may not be affected by the disposition effect. Practical implications The skilled understanding of the disposition effect will help the investors, financial institutions and policy-makers to reduce the adverse effect of this bias in the stock market. This paper contributes a detailed explanation of disposition effect and its impacts on the investors. The study of disposition effect has been found to be insufficient in the context of Indian capital market. Social implications The investors and society at large can gains insights about causes and influences of disposition effect which will be helpful to create sound investment decisions. Originality/value This paper has complied the 11 causes for the occurrence of disposition effect that are found by the different authors. The paper also highlights the impact of the disposition effect in the decision-making of various investors.

Who Files for Bankruptcy? The Heterogeneous Impact of State Laws on a Household’s Bankruptcy Decision

2019 ◽  
Vol 21 (2) ◽  
pp. 247-279 ◽  
Author(s):  
Michelle M Miller
Keyword(s):  
Positive Impact ◽  
Policy Implications ◽  
Consumption Smoothing ◽  
State Laws ◽  
Household Level ◽  
Heterogeneous Effects ◽  
Financial Characteristics ◽  
The Impact

Abstract This article examines the heterogeneous impact of state exemption laws and state garnishment laws on bankruptcy. Using a new household-level dataset, my empirical specification simultaneously examines the impact these laws have on a household’s bankruptcy decision as well as a household’s assets and unsecured debts. I find that high exemption laws have a positive impact on bankruptcy and that this effect is increasing in assets. Additionally, I find that high garnishment rates have a positive impact on bankruptcy, which is increasing in income. Moreover, I examine the policy implications of standardizing state exemption laws and state garnishments laws. Understanding the heterogeneous effects of these laws is crucial as they suggest that a household with a given set of financial characteristics will seek bankruptcy relief if it resides in one state but will have to use alternative consumption smoothing measures if it lives in a different state.

Pension reforms, liquidity constraints and labour supply responses

2010 ◽  
Vol 10 (1) ◽  
pp. 53-74 ◽  
Author(s):  
UGO COLOMBINO ◽  
ERIK HERNÆS ◽  
MARILENA LOCATELLI ◽  
STEINAR STRØM
Keyword(s):  
Cross Section ◽  
Structural Model ◽  
Labour Supply ◽  
Liquidity Constraints ◽  
Credit Market ◽  
Consumption Smoothing ◽  
Percentage Points ◽  
Retirement Decisions ◽  
No Consumption ◽  
The Impact

AbstractLabour supply responses among older people are estimated on 1996 cross-section register data covering all Norwegians aged 55–68, with an inter-temporal structural model of retirement decisions. Simulations illustrate the impact of introducing flexible pension take-up with actuarial adjustment. With the option of perfect consumption smoothing via the credit market, the reform which comes into effect in Norway from 2011 will reduce the share of retired persons in the age bracket 60–67 (in the base year 15–16%) by around 3 percentage points. With no consumption smoothing, the reduction will be 0.75 percentage points.

scholarly journals When Is Green Too Rosy? Evidence from a Laboratory Market Experiment on Green Goods and Externalities

Games ◽  
2018 ◽  
Vol 9 (3) ◽  
pp. 70
Author(s):  
Maria Fernandes ◽  
Marieta Valente
Keyword(s):  
Supply And Demand ◽  
Sustainable Consumption ◽  
Experimental Studies ◽  
Negative Externalities ◽  
Economic Experiments ◽  
Relevant Variable ◽  
Experimental Market ◽  
Sustainable Consumption And Production ◽  
Harm To Others ◽  
The Impact

In a context where sustainable consumption and production need to be encouraged, economic experiments can provide significant insights into how individuals consider environmental externalities in their choices and how public policy can foster the environmental public good. Experimental studies aiming to evaluate market mitigation of externalities through the provision of green goods usually choose to adopt neutral language in terms of framing. Our study implements an incentivized economics experiment to explore how supply and demand consider negative externalities. Furthermore, the study addresses the impact of using non-abstract wording when describing negative externalities. Two types of goods can be produced and bought, namely goods generating negative externalities on other consumers (either labelled as B or brown) and goods that cause no harm to others (either labelled A or green). We conclude that the provision of green goods increases from 18.1% in the abstract frame to 70% in the environmental frame. Framing is, therefore, a relevant variable for the outcome of this experimental market. This has important implications for economic experiments aiming to evaluate pro-environmental behaviours and provide policy orientations for the provision of green goods.

Power and Goal Setting in Channel Negotiations

1986 ◽  
Vol 23 (3) ◽  
pp. 228-236 ◽  
Author(s):  
Leigh Mcalister ◽  
Max H. Bazerman ◽  
Peter Fader
Keyword(s):  
Low Power ◽  
Goal Setting ◽  
High Power ◽  
Market Simulation ◽  
Experimental Market ◽  
Setting Mechanism ◽  
The Impact ◽  
Power Channel ◽  
Over Time

The authors investigate the use of a moderately high externally set profitability constraint as a goal-setting mechanism for controlling channel negotiators. Equal and high power channel members are shown to be made more profitable by the constraint. Low power channel members are shown to be made less profitable by the same constraint. The analysis is done in the context of an experimental market simulation that reveals the impact of the constraint and power variables on both quantity and quality of transactions completed as well as dynamics of negotiations over time.

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