Consumer biases and competences in company stock holdings

Christine W. Lai*, Jing Jian Xiao

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

8 Citations (Scopus)


Consumers may make inefficient investment decisions in holding their own-company stocks because of several biases documented by the literature of behavioral economics, such as company stock bias, home bias, and mere exposure effect. Consumers with high levels of competences may be likely to overcome biases and make effective investment decisions. Using data from the 2004 and 2007 Surveys of Consumer Finances, evidence suggests the existence of the biases and competences, whereas a higher level of consumer competence can partially offset the influence of consumer biases.

Original languageEnglish
Pages (from-to)179-212
Number of pages34
JournalJournal of Consumer Affairs
Issue number1
Publication statusPublished - 2010 Mar
Externally publishedYes

ASJC Scopus subject areas

  • General Economics,Econometrics and Finance
  • Sociology and Political Science


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