The Last Hurrah Effect: End-of-Period Temporal Landmarks Increase Optimism and Financial Risk-Taking

Understanding what drives risk-taking is fundamental for the study of choice under uncertainty. One widely discussed question is when and why people engage in risk-taking. Prior work finds evidence for an ending effect, where risk-taking increases on the last gamble in a series when outcomes are immediately realized. The authors test whether socially ubiquitous end-of-period temporal landmarks (e.g., last day of the work week, month, year) alter financial risk-taking even when outcomes are not immediate. Using data from a large peer-to-peer investment platform in the United States, they show that investors make riskier financial investment decisions on Fridays relative to those made earlier in the week. Consistent with a broader end-of-period effect, risk-taking also increases on the last day of the month, on the last day of the year, and on weekdays prior to a long weekend. Follow-up lab experiments identify a novel mechanism driving ending effects: As people near the end of a temporal period, they feel more optimistic that their financial risks will pay off, driving greater financial risk-taking. The shift in risk-taking is not without consequence: In this specific peer-to-peer context, the authors show that end-of-period investments perform worse over time, losing money relative to investments made on other days.

Authors

Publication Details

Journal
Journal of Marketing Research
Published
2024-09-19
DOI
https://doi.org/10.1177/00222437241286785
Citations
4
Primary Topic
Housing Market and Economics
Type
article
Field-Weighted Citation Impact
4.52

Funders

Controls
|||
ALL TIME
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
article

The Last Hurrah Effect: End-of-Period Temporal Landmarks Increase Optimism and Financial Risk-Taking

Avni Shah, Xinlong Li
4 citations
Journal of Marketing Research
Housing Market and Economics
4.52
article

The Last Hurrah Effect: End-of-Period Temporal Landmarks Increase Optimism and Financial Risk-Taking

Avni Shah, Xinlong Li
article en
4 citations

Abstract

Understanding what drives risk-taking is fundamental for the study of choice under uncertainty. One widely discussed question is when and why people engage in risk-taking. Prior work finds evidence for an ending effect, where risk-taking increases on the last gamble in a series when outcomes are immediately realized. The authors test whether socially ubiquitous end-of-period temporal landmarks (e.g., last day of the work week, month, year) alter financial risk-taking even when outcomes are not immediate. Using data from a large peer-to-peer investment platform in the United States, they show that investors make riskier financial investment decisions on Fridays relative to those made earlier in the week. Consistent with a broader end-of-period effect, risk-taking also increases on the last day of the month, on the last day of the year, and on weekdays prior to a long weekend. Follow-up lab experiments identify a novel mechanism driving ending effects: As people near the end of a temporal period, they feel more optimistic that their financial risks will pay off, driving greater financial risk-taking. The shift in risk-taking is not without consequence: In this specific peer-to-peer context, the authors show that end-of-period investments perform worse over time, losing money relative to investments made on other days.

Journal of Marketing ResearchVol. 62(2)
Social Sciences and Humanities Research Council of Canada
Openalex Percentile: Top 5%
Housing Market and Economics
4.52
AI Navigator

Ask Laika to Summarize, Analyze, and Connect papers live on the map.

Summarize Papers & Methodologies

Extract key findings, datasets, and comparative methods across publications.

Benchmark Rankings & Visual Analytics

Rank top research institutions, authors, funders, topics, and journals by Field-Weighted Citation Impact (FWCI) and paper volume with instant charts.

Connect Distant Disciplines

Bridge topological clusters on the map to find hidden collaborative intersections.