Some people hold on to a lagging stock because they are confident of their ability to predict future movements in stock prices, even though their confidence may not be justified. A behavioral economist would say that people who hang on to a flagging stock for this reason are subject to a framing bias.

Question

Quizplus · Accepted Answer

This behavior is better attributed to overconfidence bias, where investors overestimate their ability to predict future events, rather than framing bias, which involves reacting differently based on how information is presented.

Some People Hold on to a Lagging Stock Because They