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

Text cepa67.pdf - Published Version Restricted to registered users only Available under License Publisher holds Copyright. Download (789kB)

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

Interest & Impact

Downloads

2 since deposited on 01 Dec 2023
2 in the past 12 months

Citations

5 Citations in Web of Science ®
6 Citations in Scopus

Search

in Google Scholar™

Services

Actions (login required)

Edit item

Actions (login required)

Edit item