Journal of Navigation and Port Research (한국항해항만학회지)

Korean Institute of Navigation and Port Research (한국항해항만학회)
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Disposition Effect in the Ship Investment Market: A Case Study

  • Kim, Wu-Seok (Graduate School of National Korea Maritime and Ocean University)
  • Received : 2022.07.18
  • Accepted : 2022.10.11
  • Published : 2022.10.31
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Abstract

The purpose of this study was to analyze whether the disposition effect, a behavioral finance theory, exists in decision-making for ship investment. A case study was adopted as the research methodology, and data obtained through narrative and questionnaire responses on decision-making for ship sales were analyzed from a behavioral finance perspective. The analysis found that the disposition effect had an impact on the decision to sell a vessel. The narrative responses revealed that some shipping companies tended to miss the opportunity to maximize ship sale profit because they sold their vessels readily and quickly before the price of the vessels had risen sufficiently. The questionnaire survey results indicated that the majority of the survey respondents chose to sell a ship whose price had risen slightly from the initial purchase price. Managers in charge of ship investment should examine whether the disposition effect exists in their decision-making when selling a ship.

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