383 entries
Behavioral finance
Cognitive biases, prospect theory, mental accounting, and market-sentiment phenomena.
- Tax Refund Behavior: Why Lump-Sum Refunds Get Spent Rather Than Saved Research shows tax refunds are spent, not saved, because the lump-sum format triggers windfall mental-accounting—people treat refunds differently than regular income.
- Temporal Mental Accounting Evaluating investment gains and losses separately for different time periods rather than as a combined total return.
- The Found Money Effect: Why Tax Refunds Get Spent Fast Why tax refunds are treated as windfall gains rather than recovered wages, triggering rapid spending and weak planning despite being predictable income.
- The Just-This-Once Rationalization in Spending Decisions How the just-this-once mental move creates a temporary exception to your budget, letting people justify one-off splurges by compartmentalizing them away from normal spending rules.
- The Ostrich Effect: Why Investors Avoid Checking Bad News The documented tendency to check portfolio values less during downturns, delaying rebalancing and worsening returns.
- Topical Accounting How people evaluate financial transactions in narrow frames rather than against their total wealth position.
- Transaction Utility The separate pleasure or regret from acquiring something at a good or bad price, independent of the item's intrinsic value.
- Turn-of-the-Month Effect The clustering of positive equity returns in the trading days surrounding the end and start of calendar months.
- Unit Bias and Position Sizing How unit bias—the preference for round numbers of shares—distorts position sizing and portfolio allocation in investing.
- Using Multiple Bank Accounts as Mental Accounts How maintaining separate accounts for different financial goals replicates mental-accounting behavior, and whether it helps or hinders wealth building.
- Value Function Curvature The S-shaped utility curve in prospect theory and what its concave and convex segments predict about decisions.
- Value Premium The historical tendency for cheap stocks, measured by low price-to-earnings or price-to-book ratios, to outperform expensive stocks on a risk-adjusted basis.
- VIX Term Structure and Market Sentiment How the shape of the VIX futures curve signals whether traders expect near-term calm or sustained volatility.
- Weekend Effect The historical pattern of abnormally low or negative returns on Mondays compared to other weekdays, suggesting a link between sentiment over the weekend and stock prices.
- Why People Spend Bonus Money Differently Than Regular Pay Explore how mental accounting explains why people treat bonus income as separate from regular wages, triggering frivolous spending that regular pay would not justify.
- Why People Spend Bonuses Differently Than Regular Salary Mental accounting explains why workers treat annual bonuses as 'extra' money to spend rather than save, even when financially identical to salary.
- Why Recurring Subscriptions Feel Free: Mental Accounting and Subscription Blindness Why subscriptions feel free after initial purchase: mental accounting treats recurring auto-renewed costs as 'already paid' and outside the active spending ledger.
- Why Vacation Funds Get Spent More Freely Than Emergency Funds Why mental accounting makes vacation money feel easier to spend than emergency savings, even when the amounts are identical.
- Windfall Spending Bias The tendency to spend unexpected income much more freely than earned income of equivalent size.
- Window Dressing Herding Quarter-end portfolio cosmetics that cause institutional managers to pile into the same winning stocks to present attractive holdings to clients.
- Zero-Risk Bias The preference for eliminating a small risk entirely, even when a larger reduction of a bigger risk would yield higher expected value.
- Zero-Risk Bias in Financial Decisions How zero-risk bias drives people to eliminate small financial risks entirely, even when reducing a larger risk by more would be rationally superior.
- Zero-Sum Mental Accounting: When Saving in One Account Funds Overspending in Another Why people overspend in one category because they save in another, negating financial progress through mental accounting tricks.
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