Rationality, irrationality, and "predictable irrationality"

Does education, curriculum, or gender matter?

Authors

  • Robert C. Dolan E. C. Robins School of Business, University of Richmond, Richmond, VA
  • Jerry L. Stevens E.C. Robins School of Business, University of Richmond, Richmond, VA

DOI:

https://doi.org/10.61190/fsr.v22i2.4647

Keywords:

Investor irrationality, Behavioral finance, Sunk costs

Abstract

The behavioral finance literature suggests that ingrained biases block rational analysis by individual investors. In this study, we test for differences in a key investment bias across cohorts defined by college education, courses of study, and gender. We find that "predictable irrationality" because of a behavioral bias is a frequent and statistically significant response that is invariant with respect to college education or courses of study. Irrationality not linked to a behavioral bias varies with college education, courses of study, and gender. Men make more rational choices than women overall, but a college education eliminates the significance of the difference.

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Published

2013-06-30

How to Cite

Dolan, R. C., & Stevens, J. L. (2013). Rationality, irrationality, and "predictable irrationality": Does education, curriculum, or gender matter?. Financial Services Review, 22(2), 115–132. https://doi.org/10.61190/fsr.v22i2.4647

Issue

Vol. 22 No. 2 (2013): FSR Summer 2013

Section

New Original Submission

License

Copyright (c) 2013 Academy of Financial Services

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