Losers, winners, and biased trades

Joseph Johnson, Gerard J. Tellis, Deborah J. Macinnis

Research output: Contribution to journalReview article

52 Scopus citations


When faced with sequential information, consumers tend to fall prey to one of two well-known heuristics: the hot (or cold) hand and the gambler's fallacy. The authors relate these two traditionally separate heuristics to differences in accepting (buy) versus rejecting (sell) decisions. They identify trend length as a contextual moderating variable and show an asymmetry between buying and selling frames. When applied to a stock market context, a consistent finding is that consumers prefer to buy past winners and sell past losers even when neither should be preferred. This behavior violates the normative rule of buy low and sell high.

Original languageEnglish (US)
Pages (from-to)324-329
Number of pages6
JournalJournal of Consumer Research
Issue number2
StatePublished - Sep 1 2005


ASJC Scopus subject areas

  • Business and International Management
  • Anthropology
  • Arts and Humanities (miscellaneous)
  • Economics and Econometrics
  • Marketing

Cite this