Gender differences in investment reactions to irrelevant information

Späth, Maximilian; Goller, Daniel (September 2023). Gender differences in investment reactions to irrelevant information (CEPA Discussion Papers 67). Center for Economic Policy Analysis

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Economic agents often irrationally base their decision-making on irrelevant information. This research analyzes whether men and women react to futile information about past outcomes. For this purpose, we run a laboratory experiment (Study 1) and use field data (Study 2). In both studies, the behavior of men is consistent with falsely assumed negative autocorrelation, often referred to as gambler’s fallacy. Women’s behavior aligns with falsely assumed positive autocorrelation, a notion of the hot hand fallacy. On the aggregate, the two fallacies cancel out. Even when individuals are, on average, rational, the biases in the decision-making of subgroups might cause inefficient outcomes. In a mediation analysis, we find that a) the agents’ stated perceived probabilities of future outcomes are not blurred by irrelevant information and b) about 40 % of the observed biases are driven by differences in the perceived attractiveness of available choices caused by the irrelevant information

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics
03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Goller, Daniel

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

2628-653X

Series:

CEPA Discussion Papers

Publisher:

Center for Economic Policy Analysis

Language:

English

Submitter:

Julia Alexandra Schlosser

Date Deposited:

01 Dec 2023 12:49

Last Modified:

01 Dec 2023 12:49

BORIS DOI:

10.48350/189712

URI:

https://boris.unibe.ch/id/eprint/189712

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