Different investors-different decisions: On individual use of gain, loss and interest rate information

This study investigated how accumulating gains and losses, described as annual interest rates, influenced investment behavior. Investments after gains were on average greater than after losses regardless of the gain and loss interest rates. However, greater variance of interest rates gave some weight to that variable for gains but not for losses. We also analyzed the influence from different information cues on each participant's investments. This revealed that interest rates influenced participants very differently, some invested more with increasing gains, or with increasing losses, while others invested less. This finding explained why interest rate was a weak predictor on the group level. Furthermore, our individual analyses showed an increased sensitivity to interest rates and judged future asset accumulations when the interest rate variance was greater. Finally, subjective reports of the importance of different cues for the participants' own investments showed only some understanding of the cues influence on the investments.