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Exponential Growth Bias Matters: Evidence And Implications For Financial Decision Making Of College Students In The U.S.A., Bryan Foltice, Thomas Langer
Exponential Growth Bias Matters: Evidence And Implications For Financial Decision Making Of College Students In The U.S.A., Bryan Foltice, Thomas Langer
Scholarship and Professional Work - Business
This paper tests the exponential growth bias of undergraduate students at a top-level university in the United States and explores the potential drivers of this bias. We find that bias matters, even for college students, in making savings and debt decisions. In this sample, we observe that the individuals who have already taken on debt are more biased, while those who have experience with savings products are less biased. Moreover, those classified as possessing an awareness of compound growth as well as an ability to consistently calculate the compound savings equation are significantly less biased in different savings treatments than …
How To Decrease The Amortization Bias: Experience Vs. Rules, Bryan Foltice
How To Decrease The Amortization Bias: Experience Vs. Rules, Bryan Foltice
Scholarship and Professional Work - Business
We conduct an experimental study that tests the effectiveness of de-biasing a certain form of exponential growth bias found in household finance debt decisions, called the amortization bias. We provide 251 bachelor students at a German university with a short tutorial based on one of three learning methods: experiential learning, learning a simple “I Owe More” debt rule-of-thumb, as well as learning an extended, but more accurate version of the “I Owe More” debt rule. Immediately after completing these tutorials, we retest for the amortization bias and find a significant bias improvement in all three treatments. More importantly, after confronting …
Gender Effects On Perceptions Of Individual And Corporate Social Responsibility, Courtney Droms Hatch, Sheryl-Ann Stephen
Gender Effects On Perceptions Of Individual And Corporate Social Responsibility, Courtney Droms Hatch, Sheryl-Ann Stephen
Scholarship and Professional Work - Business
There has been an increasing importance for both individuals and companies on acting in a socially responsible manner. This study demonstrates that gender plays an important role in perceptions of social responsibility, such that the effect of an individual’s social responsibility on their perceptions of a company’s social responsibility is moderated by the gender of the respondent. Specifically, we find that women have higher levels of Internalized Moral Identity than men. Moreover, we find that women believe that organizations should be more beneficial to society than men, which translates into a higher quality of corporate social responsibility. The theoretical and …
Profitable Momentum Trading Strategies For Individual Investors, Bryan Foltice, Thomas Langer
Profitable Momentum Trading Strategies For Individual Investors, Bryan Foltice, Thomas Langer
Scholarship and Professional Work - Business
For nearly three decades, scientific studies have explored momentum investing strategies and observed stable excess returns in various financial markets. However, the trading strategies typically analyzed in such research are not accessible to individual investors due to short selling constraints, nor are they profitable due to high trading costs. Incorporating these constraints, we explore a simplified momentum trading strategy that only exploits excess returns from topside momentum for a small number of individual stocks. Building on US data from the New York Stock Exchange from July 1991 to December 2010, we analyze whether such a simplified momentum strategy outperforms the …