Tempus fugit: The impact of time constraint on investor behaviorQian Cao, Jianbiao Li and Xiaofei Niu Journal of Economic Behavior & Organization, 2022, vol. 200, issue C, 67-81 Abstract: This study experimentally examines the impact of time constraints on the disposition effect, which refers to the empirical fact that investors have a higher propensity to sell stocks with capital gains compared to stocks with capital losses. We recruit 270 student participants and implement three treatments: no time constraint (NTC), 20-s time constraint (20TC), and 10-s time constraint (10TC). We find that the 10TC treatment, where student participants perceive higher levels of time pressure than the NTC treatment, significantly reduces the disposition effect, whereas the 20TC treatment, in which feelings of time pressure do not differ from the NTC treatment, does not affect the disposition effect. Self-control is a potential explanation for the treatment effect. The replication experiment with 166 financial professionals not only indicates our results’ external validity but also shows the robustness of our results to the high time pressure (i.e., 5-s time constraint). Keywords: Disposition effect; Time constraint; Time pressure; Self-control (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:200:y:2022:i:c:p:67-81 DOI: 10.1016/j.jebo.2022.05.022 Access Statistics for this article Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D. More articles in Journal of Economic Behavior & Organization from Elsevier |
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