Sell Winners and Buy Losers? The Impact of Familiarity on Individual Investors’ Decision-Making: Experimental Results

Purpose: This article analyzes the influence of familiarity bias on respondents’ decision-making process, using results from online experiments. Design/methodology/approach: A total 255 research participants post-Soviet countries completed 510 tests that were presented in form investment games. In games, respondents allowed to sell, buy, or hold two types asset portfolios: familiar and unfamiliar assets. Findings: Holders portfolios with assets 1.34 times more likely be persistent selling winners holding losers 1.10 buying fallen than holders portfolios. Moreover, who managed tended generate terminal result distributions a kurtosis was 27.8% higher those managing Originality: Several academic studies have examined bias, disposition effect, positive feedback trading individual investors, risk-seeking trading; however, they investigated these topics separately. current study, we therefore created an experiment identify new aspects investor behavior.