Rationality, irrationality, and "predictable irrationality"
Does education, curriculum, or gender matter?
DOI:
https://doi.org/10.61190/fsr.v22i2.4647Keywords:
Investor irrationality, Behavioral finance, Sunk costsAbstract
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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