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Personality differences and investment decision-making

Jiang, Zhengyang, Peng, Cameron ORCID: 0009-0008-1297-8686 and Yan, Hongjun (2024) Personality differences and investment decision-making. Journal of Financial Economics, 153. ISSN 0304-405X

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Identification Number: 10.1016/j.jfineco.2023.103776


We survey thousands of affluent American investors to examine the relationship between personalities and investment decisions. The Big Five personality traits correlate with investors' beliefs about the stock market and economy, risk preferences, and social interaction tendencies. Two personality traits, Neuroticism and Openness, stand out in their explanatory power for equity investments. Investors with high Neuroticism and those with low Openness tend to allocate less investment to equities. We examine the underlying mechanisms and find evidence for both standard channels of preferences and beliefs and other nonstandard channels. We show consistent out-of-sample evidence in representative panels of Australian and German households.

Item Type: Article
Official URL:
Additional Information: © 2024 The Authors
Divisions: Finance
Subjects: H Social Sciences > HG Finance
B Philosophy. Psychology. Religion > BF Psychology
JEL classification: D - Microeconomics > D9 - Intertemporal Choice and Growth > D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving
G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice; Investment Decisions
Date Deposited: 02 Feb 2024 00:09
Last Modified: 11 Jul 2024 04:57

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