Carnegie Mellon University

Ostrich Effect

December 17, 2015

Even With 24/7 Access, “Ostrich Effect” Takes Over When Markets Are Down

CMU’s George Loewenstein and Duane Seppi first introduced the “ostrich effect” in 2009 to describe how investors “put their heads in the sand” to dodge facing their financial portfolios when they’re expecting bad news. The new data documents that ostrich behavior is widely prevalent, even with today’s around-the-clock access to financial information.

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