Dynamic Regret Avoidance

In a stock market experiment, we examine how regret avoidance influences the decision to sell an asset while its price changes over time. Participants know beforehand whether they will observe future prices after or not. Without prices, participants are affected only by about previously observed high (past regret), but when available, also avoid expected after-sale (future regret). Moreover, as relative sizes of past and change, dynamically switch between them. This demonstrates multiple reference points influence sales. (JEL C91, G12, G41)