Cognitive Dissonance: Hard to Fire Yourself; Easy to Fire Your Manager

Cognitive Dissonance: Hard to Fire Yourself; Easy to Fire Your Manager by Wesley R. Gray, Ph.D., Alpha Architect,  Author, Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors

Looking for Someone to Blame: Delegation, Cognitive Dissonance, and the Disposition Effect

• Chang, Solomon, Westerfield
• A version of the paper can be found here.
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Abstract:

We analyze brokerage data and an experiment to test a cognitive-dissonance based theory of trading: investors avoid realizing losses because they dislike admitting that past purchases were mistakes, but delegation reverses this effect by allowing the investor to blame the manager instead. Using individual trading...