Investor Logins and the Disposition Effect

Quispe-Torreblanca, Edika; Gathergood, John; Loewenstein, George; Stewart, Neil

Abstract

Using data from an online brokerage, we examine the role of investor logins in trading behavior. We find that a new reference point is created when an investor logs in and views the investor’s portfolio. We observe this as a disposition effect on returns since last login in addition to the traditional disposition effect on returns since purchase. Further, these reference points produce a strong interaction such that even a small loss since last login nullifies the positive effect of a gain since purchase. This interaction follows if investors select the higher, more aspirational price as a reference point.

Citation

Quispe-Torreblanca, E., Gathergood, J., Loewenstein, G., & Stewart, N. (2025). Investor Logins and the Disposition Effect. Management Science, 71(1), 219–239. https://doi.org/10.1287/mnsc.2022.00359

• Journal Article Type: Article
• Acceptance Date: Jun 14, 2023
• Online Publication Date: Apr 2, 2024
• Publication Date: 2025-01
• Deposit Date: Jun 22, 2023
• Publicly Available Date: Apr 2, 2024
• Journal: Management Science
• Print ISSN: 0025-1909
• Electronic ISSN: 1526-5501
• Publisher: INFORMS
• Peer Reviewed: Peer Reviewed
• Volume: 71
• Issue: 1
• Pages: 219–239
• DOI: https://doi.org/10.1287/mnsc.2022.00359
• Keywords: reference point • disposition effect • attention • login • investor behavior
• Public URL: https://nottingham-repository.worktribe.com/output/22181753
• Publisher URL: https://pubsonline.informs.org/doi/10.1287/mnsc.2022.00359