Campus Only Senior Thesis
Bachelor of Arts
Patrick Van Horn
© 2018 Kira K Gabriel
Previous literature has produced mixed findings of a tendency of investors, coined the “ostrich effect” to display a preference for avoiding potentially painful information regarding their portfolios. This paper investigates the presence of the ostrich effect during the 2008/2009 financial crisis via a survey of investors who held portfolios before and through that period. The results demonstrate that most investors do not report any ostrich effect. However, approximately one fourth of investors demonstrated a preference for delaying learning about potentially negative portfolio information, but ultimately chose to learn the information. These findings provide a more nuanced understanding of investors’ behaviors during financial crises and supports a more specific definition of the ostrich effect. Specifically, that some investors prefer a delay in painful information acquisition but do no indefinitely “keep their heads in the sand.”
Gabriel, Kira Knowles, "The Ostrich Effect: A Survey Analysis of Burying One's Head in the Sand" (2019). Scripps Senior Theses. 1320.
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.