Projection bias by investors: A market approach

Doron Kliger, Ori Levy

Research output: Contribution to journalArticlepeer-review


Decision makers often fail to forecast their future feeling, erroneously projecting current preferences onto future preferences, an attribute recently labeled "projection bias" [Loewenstein, G., O'Donoghue, T., Rabin, M., 2003. Projection bias in predicting future utility. Quarterly Journal of Economics 118, 1209-1248]. There is sweeping psychological evidence for the existence of projection bias. Still, a scrutiny of projection bias based on real (rather than experimental) data is lacking. This paper devises and implements such a framework. Using US asset market data, our statistical findings unequivocally support the existence of projection bias in investors' decision-making processes.

Original languageEnglish
Pages (from-to)657-668
Number of pages12
JournalJournal of Economic Behavior and Organization
Issue number3-4
StatePublished - Jun 2008


  • Market data
  • Projection bias

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management


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