Consumer biases and competences in company stock holdings

Document Type

Article

Date of Original Version

3-1-2010

Abstract

Consumers may make inefficient investment decisions in holding their own-company stocks because of several biases documented by the literature of behavioral economics, such as company stock bias, home bias, and mere exposure effect. Consumers with high levels of competences may be likely to overcome biases and make effective investment decisions. Using data from the 2004 and 2007 Surveys of Consumer Finances, evidence suggests the existence of the biases and competences, whereas a higher level of consumer competence can partially offset the influence of consumer biases. Copyright 2010 by The American Council on Consumer Interests.

Publication Title, e.g., Journal

Journal of Consumer Affairs

Volume

44

Issue

1

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