The 1/N Rule revisited: heterogeneity in the naïve diversification bias

Daniel Fernandes

doi:10.1016/j.ijresmar.2013.04.001

The 1/N Rule revisited: heterogeneity in the naïve diversification bias

Daniel Fernandes^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

12 Citations (Scopus)

Abstract

This paper examines the naïve diversification bias, the tendency of consumers to diversify their investments beyond what is justifiable on economically rational grounds (Benartzi & Thaler, 2001). The naïve diversification bias is replicated across different samples using a within-participant manipulation of portfolio options. Only differences in focus on intuition predicted this bias. The more investors use intuitive judgments, the more likely they are to display the naïve diversification bias.

Original language	English
Pages (from-to)	310-313
Number of pages	4
Journal	International Journal of Research in Marketing
Volume	30
Issue number	3
DOIs	https://doi.org/10.1016/j.ijresmar.2013.04.001
Publication status	Published - Sept 2013
Externally published	Yes

Keywords

Financial decision making
Heuristics
Intuitive judgments
Naïve diversification bias
Variety-seeking

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10.1016/j.ijresmar.2013.04.001

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abstract = "This paper examines the na{\"i}ve diversification bias, the tendency of consumers to diversify their investments beyond what is justifiable on economically rational grounds (Benartzi & Thaler, 2001). The na{\"i}ve diversification bias is replicated across different samples using a within-participant manipulation of portfolio options. Only differences in focus on intuition predicted this bias. The more investors use intuitive judgments, the more likely they are to display the na{\"i}ve diversification bias.",

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The 1/N Rule revisited: heterogeneity in the naïve diversification bias

Abstract

Keywords

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