Abstract
Existing literature shows that biases related to awareness can influence investors’ decisions when constructing portfolios or making financial decisions. In this paper, we examine whether student investors are drawn to stocks issued by companies with large general marketing budgets, based on the Ad Age 200, and stocks that are associated with popular brands. A field experiment was conducted in which undergraduate students constructed their own virtual stock portfolios. A treatment group of students was given a training seminar in stock market fundamentals in order to enhance their skillsets for stock market analysis and stock selection. The treatment group was compared to a control group, which received no such training, with the intent to study differences in stock selection. We found that the training made no difference in students’ portfolios, and, in fact, students in both groups were biased toward stocks associated with companies on the Ad Age 200 or with popular brands (defined by a novel proxy measure). Students in both groups were also more biased toward such stocks than the general market. Our results contribute to the ongoing exploration of awareness-related biases in stock selection and give new evidence concerning the susceptibility of college students in particular to such biases in constructing stock portfolios.
Recommended Citation
Psaradakis, George; Deacle, Scott; Henkel, Rudolph; and Aukers, Steve
(2023)
"DO STUDENTS BUY “FAMILIAR” STOCKS? A FIELD EXPERIMENT,"
Pennsylvania Economic Review: Vol. 30:
No.
1, Article 5.
DOI: https://doi.org/10.65193/3067-8080.1028