The Role of Company Affect in Stock Investments: Towards Blind, Undemanding, Non-Comparative, and Committed Love

Journal of Behavioral Finance, Vol. 11, No. 2, pp. 103-113, 2009

40 Pages Posted: 8 Sep 2010

See all articles by Jaakko Aspara

Jaakko Aspara

Hanken School of Economics; Aalto University School of Business (formerly known as Helsinki School of Economics)

Henrikki Tikkanen

Aalto University - Department of Marketing and Management

Date Written: 2009

Abstract

This conceptual article aims to contribute to the discussion of the role of individuals’ perceptions and affective evaluations of companies in their decisions to buy/hold the companies’ stocks. Based on psychological finance and marketing literatures, the authors explicate five different ways in which an individual’s positive affect towards a company may influence his/her decisions to buy/hold the stocks of the company. The authors argue that an individual’s positive affect towards a company has positive influence on overoptimism and on overconfidence in expectations of financial returns from the company’s stock. Furthermore, the authors argue that the positive affect towards for a company has negative influence on the expected financial returns from ownership of its stock which the individual requires or is satisfied with; negative influence on the consideration he/she gives to other investment opportunities; and positive influence on his/her unwillingness to sell its stock. The authors illustrate the influences with “love” metaphors and discuss their implications to the marketing/finance interface.

Keywords: Investor Psychology, Individual Investor, Affect, Love, Consumers, Stakeholders

Suggested Citation

Aspara, Jaakko and Tikkanen, Henrikki, The Role of Company Affect in Stock Investments: Towards Blind, Undemanding, Non-Comparative, and Committed Love (2009). Journal of Behavioral Finance, Vol. 11, No. 2, pp. 103-113, 2009. Available at SSRN: https://ssrn.com/abstract=1673311

Jaakko Aspara (Contact Author)

Hanken School of Economics ( email )

P.O. Box 479
Helsinki, Helsinki 00101
Finland

Aalto University School of Business (formerly known as Helsinki School of Economics) ( email )

P.O. Box 21230
Helsinki, 00076
Finland

Henrikki Tikkanen

Aalto University - Department of Marketing and Management ( email )

P.O. Box 1210
Helsinki, FIN-00101
Finland

Register to save articles to
your library

Register

Paper statistics

Downloads
64
Abstract Views
704
rank
340,792
PlumX Metrics