Risk behavior in share transactions: When investors think about reasons

Numerous studies suggest that our judgments are not only affected by the availability of advantages or disadvantages of a target, but also by the ease with which this information comes to mind. Study 1 applied this reasoning to the judgment of equity funds. In. a pretest, it was found that it was easy for participants to list one, but difficult to list more than one advantage or disadvantage of equity funds with a wide margin of fluctuation. Therefore, participants were asked to list either one or three advantages or disadvantages of these,equity funds. If participants listed one argument, the content of the argument was of importance. Participants who specified a benefit judged the equity funds', more positive than participants who specified a handicap. However, the listing of three arguments did not strengthen this effect. In fact, the generation of three advantages resulted in a more negative evaluation that the generation of three disadvantages. These effects of argument generation were moderated by the need for cognition and the experience of the investors. For participants with first experience in the stock market and for those with a high need for cognition the reported influence of argument generation was limited. In Study 2, the results were replicated.