The authors would like to acknowledge the grant to Christine Lai from National Science Council in Taiwan (95-2745-H-155-003-HPU).
Consumer Biases and Competences in Company Stock Holdings
Article first published online: 4 MAR 2010
Copyright 2010 by The American Council on Consumer Interests
Journal of Consumer Affairs
Volume 44, Issue 1, pages 179–212, Spring 2010
How to Cite
LAI, C. W. and XIAO, J. J. (2010), Consumer Biases and Competences in Company Stock Holdings. Journal of Consumer Affairs, 44: 179–212. doi: 10.1111/j.1745-6606.2010.01162.x
- Issue published online: 4 MAR 2010
- Article first published online: 4 MAR 2010
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.