Being Present: The Influence of Mindfulness on Financial Decisions

60 Pages Posted: 13 Sep 2021 Last revised: 27 Dec 2021

See all articles by William Bazley

William Bazley

University of Kansas

Carina Cuculiza

Marquette University

Kevin Pisciotta

University of Kansas - School of Business

Date Written: October 24, 2021

Abstract

Mindfulness, the meditative process of non-judgmentally focusing on the present, has gained popularity as an accessible and efficacious cognitive behavioral therapy. We experimentally examine whether state mindfulness affects individuals' preferences and financial choices. By shifting attentional focus to the present, mindfulness increases individuals' subjective discount rates. Consequently, state mindfulness causes people to invest less and realize more of their stock gains, which reduces trading performance. Evidence from field data reinforces the experimental findings. Our results highlight that health initiatives can have direct effects on financial decision-making, which is likely to be increasingly relevant as individuals continue to adopt self-help therapeutics.

Keywords: Digital health therapeutics, disposition effect, household finance, time preferences

JEL Classification: G11, G40, G41, G50

Suggested Citation

Bazley, William and Cuculiza, Carina and Pisciotta, Kevin, Being Present: The Influence of Mindfulness on Financial Decisions (October 24, 2021). Available at SSRN: https://ssrn.com/abstract=3921871 or http://dx.doi.org/10.2139/ssrn.3921871

William Bazley (Contact Author)

University of Kansas ( email )

3143 Capitol Federal Hall
1654 Naismith Drive
Lawrence, KS 66045
United States

Carina Cuculiza

Marquette University ( email )

P.O. Box 1881
Milwaukee, WI 53201-1881
United States

Kevin Pisciotta

University of Kansas - School of Business ( email )

Capital Federal Hall
1654 Naismith Dr
Lawrence, KS 66045
United States

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