Template-Type: ReDIF-Paper 1.0
Title: Experience Effects on Wall Street vs. Main Street: Field and Lab Evidence of Context Dependence
Author-Name: Benjamin Christoffersen 
Author-Email: boennecd@gmail.com
Author-Name: Arvid Hoffmann
Author-Email: arvid.hoffmann@adelaide.edu.au
Author-Name: Zwetelina Iliewa
Author-Email: zwetelina.iliewa@gmail.com
Author-Name: Lena Jaroszek
Author-Email: lja.fi@cbs.dk
Classification-JEL: D83, D84, G02, G17
Keywords: experience effects, finance professionals, reinforcement learning, salience, attention

Abstract: 
We examine how and why context influences experiential learning, comparing professional and private-context stock market experiences. We find opposing
 patterns: In professional contexts, experiential learning exhibits a primacy bias, where sticky early experiences cause an underreaction to subsequent
experiences. In contrast, in private contexts, a recency bias causes beliefs to fluctuate excessively over time. To identify the causal effect of context, we leverage
(i) panel data on the dynamics of context-related experiences and expectations of finance professionals and (ii) experimental data on investment choices. Our
experimental design allows us to identify the cognitive mechanisms underlying the documented context dependence of experience effects.

Note: 
Length: 67
Creation-Date: 2025-04
Revision-Date:
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp684
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2025_684