Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If You Use a Screen Reader

This content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.

The Disposition to Sell Winners Too Early and Ride Losers Too Long: Theory and Evidence

Hersh Shefrin and Meir Statman
The Journal of Finance
Vol. 40, No. 3, Papers and Proceedings of the Forty-Third Annual Meeting American Finance Association, Dallas, Texas, December 28-30, 1984 (Jul., 1985), pp. 777-790
Published by: Wiley for the American Finance Association
DOI: 10.2307/2327802
Stable URL: http://www.jstor.org/stable/2327802
Page Count: 14
  • Read Online (Free)
  • Download ($33.95)
  • Subscribe ($19.50)
  • Cite this Item
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
The Disposition to Sell Winners Too Early and Ride Losers Too Long: Theory and Evidence
Preview not available

Abstract

One of the most significant and unique features in Kahneman and Tversky's approach to choice under uncertainty is aversion to loss realization. This paper is concerned with two aspects of this feature. First, we place this behavior pattern into a wider theoretical framework concerning a general disposition to sell winners too early and hold losers too long. This framework includes other elements, namely mental accounting, regret aversion, self-control, and tax considerations. Second, we discuss evidence which suggests that tax considerations alone cannot explain the observed patterns of loss and gain realization, and that the patterns are consistent with a combined effect of tax considerations and the three other elements of our framework. We also show that the concentration of loss realizations in December is not consistent with fully rational behavior, but is consistent with our theory.

Page Thumbnails

  • Thumbnail: Page 
777
    777
  • Thumbnail: Page 
778
    778
  • Thumbnail: Page 
779
    779
  • Thumbnail: Page 
780
    780
  • Thumbnail: Page 
781
    781
  • Thumbnail: Page 
782
    782
  • Thumbnail: Page 
783
    783
  • Thumbnail: Page 
784
    784
  • Thumbnail: Page 
785
    785
  • Thumbnail: Page 
786
    786
  • Thumbnail: Page 
787
    787
  • Thumbnail: Page 
788
    788
  • Thumbnail: Page 
789
    789
  • Thumbnail: Page 
790
    790