Selling losers and keeping winners: How (savings) goal dynamics predict a reversal of the disposition effect

J. Aspara, A.O.I. Hoffmann*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


A well-documented behavioral pattern in consumer financial decision making is the disposition effect, which refers to the tendency to sell winning investments too early while holding on to losing investments too long. This bias has negative wealth consequences, because typically, individuals' losing investments continue to underperform while their winning investments continue to outperform. Using a goal-systemic framework, the present research indicates that individuals' susceptibility to the disposition effect can be reversed by activating a superordinate (savings) goal. Experimental results indicate that three effective ways to activate a superordinate (savings) goal, and thereby reverse the disposition effect, are as follows: (1) subtly prime it with goal-related words, (2) prime it by making an overall portfolio loss salient, and (3) prime it by explicitly mentioning a goal with a clear-end state.

Data source: no data source used
Original languageEnglish
Pages (from-to)201-211
JournalMarketing Letters
Issue number2
Publication statusPublished - 1 Jan 2015

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