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Review of Finance Vol. 9 No. 2 2005

What's in a Name? An Experimental Examination of Investment Behavior

Lucy F. Ackert1; Bryan K. Church2; James Tompkins1; Ping Zhang3

1 Michael J. Coles College of Business, Kennesaw State University 1 · 2 College of Management, Georgia Tech 2 · 3 Rotman School of Management, University of Toronto 3

Abstract

A fundamental unresolved issue is whether information asymmetries underlie investors' predisposition to invest close to home (i.e., domestically or locally). We conduct experiments in the United States and Canada to investigate agents' portfolio allocation decisions, controlling for the availability of information. Providing participants with information about a firm's home base, without disclosing its specific identity, is not sufficient to change investment behavior. Rather, participants need to know a firm's name and home base. Additional evidence indicates that participants have a greater perceived familiarity with local and domestic securities and, in turn, invest more in such securities.

DOI
10.1007/s10679-005-7594-2
Volume
9
Issue
2
Pages
281-304
Language
en
Sources
bibtex:phds-export.bib openalex openalex crossref

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