At the Top of the Mind: Peak Prices and the Disposition Effect

Abstract

The disposition effect is the reluctance to sell assets at a loss relative to a salient point of reference, typically assumed to be the purchase price. Using data on stocks and housing sales, we show that the peak price achieved by an asset during the investor’s period of holding constitutes an additional salient reference point for asset owners that overlaps—and interacts—with the purchase price reference point. Peaks occurring before the investor purchased the asset do not affect future sales, indicating that ownership affects how investors form reference points.

Metadata

Item Type:	Article
Authors/Creators:	Quispe-Torreblanca, E. https://orcid.org/0000-0002-0974-0705 Hume, D. Gathergood, J. Loewenstein, G. Stewart, N.
Copyright, Publisher and Additional Information:	© 2025 The University of Chicago. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License (CC BY-NC 4.0), which permits non-commercial reuse of the work with attribution. For commercial use, contact journalpermissions@press.uchicago.edu. Rights for text and data mining and training of artificial intelligence technologies or similar technologies are reserved. Published by The University of Chicago Press.
Dates:	Accepted: 10 February 2025 Published (online): 12 December 2025 Published: February 2026
Institution:	The University of Leeds
Academic Units:	The University of Leeds > Faculty of Business (Leeds) The University of Leeds > Faculty of Business (Leeds) > Analytics, Technology & Ops Department
Date Deposited:	22 Aug 2024 15:36
Last Modified:	06 Mar 2026 17:24
Status:	Published
Publisher:	University of Chicago Press
Identification Number:	10.1086/735785
Open Archives Initiative ID (OAI ID):	oai:eprints.whiterose.ac.uk:216367

Download

Published Version

Filename: 735785.pdf

Licence: CC-BY-NC 4.0

CLICK TO DOWNLOAD

CORE (COnnecting REpositories)

At the Top of the Mind: Peak Prices and the Disposition Effect

Abstract

Metadata

Download

Published Version

Export

Statistics