DOI QR코드

DOI QR Code

The Effects of Loss Aversion and Construal Level on the Attitude toward Financial Products

투자자의 손실회피 성향과 해석수준이 금융상품 태도에 미치는 영향

  • Received : 2016.10.28
  • Accepted : 2017.03.21
  • Published : 2017.03.31

Abstract

Financial products entail either gains or losses, and customers' psychological reaction to these gains and losses affect the selection of the financial products. This study explains the financial customers' behavior by introducing consumers' psychological variables such as loss aversion and construal levels. According to the construal level theory, people use more abstract and higher levels of construal to represent objects that are more distant on psychological distance. Based on extant research about loss aversion and construal levels, this study proposes two hypotheses and test the hypotheses. The experimental study examines how loss aversion affects the choice between deposit products and fund products in short-term and long-term investment situations. In the long-term condition the respondents prefer fund products to deposit products, whereas in the short-term condition the respondents have showed the opposite result. Also, the effects of loss aversion on preferences for financial products have interacted with the time horizon of investments. Implications and limitations are discussed to establish more effective marketing strategies based on the results of this study.

Acknowledgement

Supported by : 한국연구재단

References

  1. 주소현 2009. "가계의 적립식 펀드와 거치식 펀드 투자 행동," 보험금융연구 (20:3), pp. 247-281.
  2. 차경욱, 정다은 2013. "개인투자자의 손실회피 성향, 위험태도와 가계금융자산 보유 특성," Financial Planning Review (6:3), pp. 119-141.
  3. 탁동일, 윤차영 2010. "국내 은행의 금융 IT전략과 지식경영에 관한 연구," 금융지식연구 (8:2), pp. 81-103.
  4. Charles, K., and Hurst, E. 2002. "The Correlation of Wealth across Generations," National Bureau of Economic Research Working Paper, 9314.
  5. Ennew, C. T., and Waite, N. 2007. "Financial Services Marketing, Butterworth-Heinemann," MA.
  6. Ehrlich, E., and Fanelli, D. 2004. "The Financial Services Marketing Handbook," Bloomberg Press, NJ.
  7. Fujita, K., Henderson, M. D., Eng, J., Trope, Y., and Liberman, N. 2006. "Spatial Distance and Mental Construal of Social Events," Psychological Science (17:4), pp. 278-282. https://doi.org/10.1111/j.1467-9280.2006.01698.x
  8. Grable, J. E., and Lytton, R. H. 1999. "Financial Risk Tolerance Revisited: The development of a Risk Assessment Instrument," Financial Serves Review (8:3), pp. 163-181. https://doi.org/10.1016/S1057-0810(99)00041-4
  9. Hanna, S., and Chen, P. 1997. "Subjective and Objective Risk Tolerance: Implications for Optimal Portfolios," Financial Counseling and Planning (8:2), pp. 17-26.
  10. Kahneman, D., and Tversky, A. 1979. "Prospect Theory: An Analysis of Decision Under Risk," Econometrica, (47:2), pp. 263-292. https://doi.org/10.2307/1914185
  11. Ledgerwood, A., Wakslak, C. J., and Wang, M. A. 2010. "Differential Information Use for Near and Distant Decisions," Journal of Experimental Social Psychology, (46:4), pp. 638-642. https://doi.org/10.1016/j.jesp.2010.03.001
  12. Liberman, N., and Trope, Y. 1998. "The Role of Feasibility and Desirability Considerations in Near and Distant Future Decision: A Test of Temporal Construal Theory," Journal of Personality and Social Psychology, (75:1), pp. 5-18. https://doi.org/10.1037/0022-3514.75.1.5
  13. Liberman, N., Sagristano, M. D., and Trope, Y. 2002. "The Effect of Temporal Distance on Level of Mental Construal," Journal of Experimental Social Psychology, (38:6), pp. 523-534. https://doi.org/10.1016/S0022-1031(02)00535-8
  14. Samuelson, W., and Zeckhauser, R. 1988. "Status Quo Bias in Decision Making," Journal of Risk and Uncertainty, (1:1), pp. 7-59. https://doi.org/10.1007/BF00055564
  15. Shefrin, H., and Statman, M. 1985. "The Disposition to Sell Winners Too Early and Ride Losers Too Long: Theory and Evidence," Journal of Finance, (40:3), pp. 777-790. https://doi.org/10.1111/j.1540-6261.1985.tb05002.x
  16. Simon, H. A. 1979. "Rational Decision Making in Business Organizations," The American Economic Review, (69:4), pp. 493-513.
  17. Thaler, R. H. 1980. "Toward a Positive Theory of Consumer Choice," Journal of Economic Behavior and Organization, (1:1), pp. 39-60. https://doi.org/10.1016/0167-2681(80)90051-7
  18. Trope, Y., and Liberman, N. 2000. "Temporal Construal and Time-Dependent Changes in Preference," Journal of Personality and Social Psychology, (79:6), pp. 876-889. https://doi.org/10.1037/0022-3514.79.6.876
  19. Trope, Y., and Liberman, N. 2003. "Temporal Construal," Psychological Review, (110:3), pp. 403-421. https://doi.org/10.1037/0033-295X.110.3.403
  20. Trope, Y., and Liberman, N. 2010. "Construal Level Theory of Psychological Distance," Psychological Review, (117:2), pp. 440-463. https://doi.org/10.1037/a0018963
  21. Trope, Y., Liberman, N., and Wakslak, C. 2007. "Construal Levels and Psychological Distance: Effects on Representation, Prediction, Evaluation, and Behavior," Journal of Consumer Psychology, (117:2), pp. 440-463.
  22. Tversky, A., and Kahneman, D. 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, (5:4), pp. 297-323. https://doi.org/10.1007/BF00122574
  23. Wakslak, C., and Trope, Y. 2009. "The Effect of Construal Level on Subjective Probability Estimates," Psychological Science, (20:1), pp. 52-58. https://doi.org/10.1111/j.1467-9280.2008.02250.x
  24. Wang, C., and Hanna, S. D. 2007. "The Risk Tolerance and Stock Ownership of Business Owing households," Financial Counseling and Planning, (18:2), pp. 3-18.
  25. Zhou, R., and Pham, M. T. 2004. "Promotion and Prevention across Mental Accounts: When Financial Products Dictate Consumers' Investment Goals," Journal of Consumer Research, (31:1), pp. 125-135. https://doi.org/10.1086/383429