Degree of Personal Responsibility in Decisions and the Likelihood to Abandon an Investment among Professionals: Evidence from a Lab-in-the-Field Experiment

Abstract

We study how the degree of personal responsibility in prior investment decisions affects the likelihood of changing an investment after experiencing a gain or loss. To this end we conduct a lab-in-the-field experiment with professional participants from the finance and controlling department of a large infrastructure company. Consistent with our hypothesis and prior findings from student samples we observe that lower personal responsibility in the decision is associated with a higher likelihood of changing the investment project after a loss. However, this effect disappears with age, which we interpret as experience in the professional career.