Abstract
Does fear create a bias in favor of high-priced stocks? An analysis of the S&P 500 stock prices during the COVID-19 market crash showed that high-priced stocks outperformed low-priced ones (study 1). Experimental data further confirmed that fear induced by thoughts about the pandemic increased individuals’ preference for high-priced stocks when they were forced to choose one stock from a set of alternatives (study 2). Although fear generally decreased the preference for stocks when the market trended downward, this decrease was less for high-priced stocks than for low-priced ones (study 3). Reasons for and implications of this bias are discussed.
| Original language | English |
|---|---|
| Pages (from-to) | 115-123 |
| Number of pages | 9 |
| Journal | Journal of the Association for Consumer Research |
| Volume | 7 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - Jan 2022 |
| Externally published | Yes |
Bibliographical note
Publisher Copyright:© 2021 Association for Consumer Research. All rights reserved.
