The Empirical Evidence on the Disposition Effect Finance Essay
Disposition effect, which is studied by many literatures, is one of popular bias of investors. It was firstly suggested by Shefrin and Statman (1985). They gave an explanation of the disposition effect that “Investors have tendency to sell winners too early and ride losers too long.” Moreover, the result from the experiment of Odean (1998) supported the disposition effect theory. Odean (1998) compared between Proportion of Gains Realized (PGR) and Proportion of Losses Realized (PLR). PGR can be calculated by […]