Self‐control and investment choices

Three studies ( N 1 = 799, N 2 = 359, and N 3 = 310) investigating the role of self‐control in investment decisions are reported. Study 1 focused on links between trait self‐control, the propensity to invest, and the propensity to make risky investment decisions. Study 2 investigated whether reflecting on one's prior successes and failures in exercising self‐control has an impact on subsequent investment decisions. Study 3 considered the joint effect of both self‐control factors considered in the first two studies. The results indicated that self‐control plays a significant role in explaining investment decisions. Specifically, self‐control level was positively related to the propensity to invest but negatively related to the propensity to take investment risks. Paralleling these findings, participants reflecting on situations in which they resisted temptation allocated more money to investments than control group members but were less willing to make risky decisions when creating investment portfolios. Finally, an interplay was observed between trait self‐control and factors modifying the situational level of this variable: Among participants recalling successes in self‐control, higher levels of trait self‐control were linked to investment decisions, but this was untrue for participants reflecting on failures in self‐control.