Finding gender differences in trading behavior: A priming approach

• Main Authors: Cabual, Paul C., Fernandez, Ma. Isabel, Lee, Shannen Mae, Yu, Jeffrey Benjamin
• Format: text
• Published: Animo Repository 2018
• Subjects: Investments—Sex differences; Behavioral Economics; Economics
• Online Access: https://animorepository.dlsu.edu.ph/faculty_research/11025
• Institution: De La Salle University

Does investment behavior change when gender identities are more pronounced? This paper investigates the social and individual-level effects of the gender dichotomy on two contending mechanisms of the disposition effect. The first being asymmetric risk attitudes of prospect theory; the second being belief in mean reversion. Although traditional economics assume that people behave rationally, investors’ hastily securing profits from winning stocks while clinging onto losses from failing ones is a global phenomenon. Through an experiment, we empirically examined how asymmetric risk attitudes and belief in mean reversion prompt the disposition effect when individually primed for gender salience and surrounded by the same sex. We found that the disposition effect was more pronounced in masculine males. We also affirm that men are more risk-seeking and optimistic in gains while women were more focused on reducing their losses. Notably, our male participants were more competitive when grouped amongst each other while their presence prompted women to take in more risk, especially when it came to profits.