Mental framing effects in dynamic portfolio choice
De Giorgi E. Omar A. Post T.
December 2025Elsevier B.V.
Journal of Behavioral and Experimental Finance
2025#48
We present experimental evidence of systematic decision errors in dynamic portfolio choice. Participants created contingency plans in a lattice model. When returns were independent and identically distributed, most plans were near-optimal for plausible risk preferences. However, under dynamic probabilities, most plans were inefficient, even by First-degree Stochastic Dominance. Allocations showed a lack of sensitivity to probability shifts, consistent with myopic loss aversion. Decision quality improved when participants compared their original plan to precomputed optimal plans. Results highlight the importance of problem framing in dynamic choice and support a libertarian paternalistic approach to choice architecture.
Choice experiments , Dynamic portfolio choice , Myopic loss aversion
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Department of Economics of the University of St.Gallen, Switzerland
of Business, Nazarbayev University, Kabanbay Batyr 53, Astana, 010000, Kazakhstan
Department of Economics of the University of St.Gallen
of Business
10 лет помогаем публиковать статьи Международный издатель
Книга Публикация научной статьи Волощук 2026 Book Publication of a scientific article 2026