Measuring contextuality in investment preferences

Polina Khrennikova

doi:10.1007/s10479-025-06630-8

Measuring contextuality in investment preferences

Polina Khrennikova

Research output: Contribution to journal › Article › peer-review

3 Citations (Scopus)

13 Downloads (Pure)

Abstract

This study investigates the role of contextuality in investment preference formation, specifically in global investments and major US stocks. Utilizing the "Contextuality by Default" framework (Dzhafarov and Kujala in PLoS ONE 8:e61712, 2013; J Math Psychol 74:11–33, 2016), we measure contextuality within a cyclic system of random variables. Through two experiments, each with four context stimuli, we assess contextuality across various decision-making scenarios. Our results indicate the presence of "true" contextuality in global investment decisions, but not in US stock selections. We investigate the determinants of contextual preference formation, focusing on factors such as future return expectations, risk perception, and familiarity with stock markets and individual US stocks. Employing logistic regression analysis for the first two contexts, we find that preferences in foreign stock markets exhibit instability, indicating context-specific drivers. On the other hand, familiarity with individual companies and future return expectations consistently influence investment preferences in specific US stocks.

Original language	English
Number of pages	31
Journal	Annals of Operations Research
DOIs	https://doi.org/10.1007/s10479-025-06630-8
Publication status	Published - 26 May 2025

Bibliographical note

Copyright © The Author(s) 2025. This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit https://creativecommons.org/licenses/by/4.0/.

Funding

The study is supported by the British Academy/Leverhulme Small Grant Scheme, 2019–2022, Grant reference: SRG19\190732.

Access to Document

10.1007/s10479-025-06630-8Licence: CC BY 4.0

Measuring contextuality in investment preferences
Copyright © The Author(s) 2025. This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit https://creativecommons.org/licenses/by/4.0/.
Final published version, 938 KBLicence: CC BY 4.0

Cite this

@article{55ffff83065f4ec6b7c5049394ca91b7,

title = "Measuring contextuality in investment preferences",

abstract = "This study investigates the role of contextuality in investment preference formation, specifically in global investments and major US stocks. Utilizing the {"}Contextuality by Default{"} framework (Dzhafarov and Kujala in PLoS ONE 8:e61712, 2013; J Math Psychol 74:11–33, 2016), we measure contextuality within a cyclic system of random variables. Through two experiments, each with four context stimuli, we assess contextuality across various decision-making scenarios. Our results indicate the presence of {"}true{"} contextuality in global investment decisions, but not in US stock selections. We investigate the determinants of contextual preference formation, focusing on factors such as future return expectations, risk perception, and familiarity with stock markets and individual US stocks. Employing logistic regression analysis for the first two contexts, we find that preferences in foreign stock markets exhibit instability, indicating context-specific drivers. On the other hand, familiarity with individual companies and future return expectations consistently influence investment preferences in specific US stocks.",

author = "Polina Khrennikova",

note = "Copyright {\textcopyright} The Author(s) 2025. This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit https://creativecommons.org/licenses/by/4.0/.",

year = "2025",

month = may,

day = "26",

doi = "10.1007/s10479-025-06630-8",

language = "English",

journal = "Annals of Operations Research",

issn = "0254-5330",

publisher = "Springer",

}

TY - JOUR

T1 - Measuring contextuality in investment preferences

AU - Khrennikova, Polina

N1 - Copyright © The Author(s) 2025. This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit https://creativecommons.org/licenses/by/4.0/.

PY - 2025/5/26

Y1 - 2025/5/26

N2 - This study investigates the role of contextuality in investment preference formation, specifically in global investments and major US stocks. Utilizing the "Contextuality by Default" framework (Dzhafarov and Kujala in PLoS ONE 8:e61712, 2013; J Math Psychol 74:11–33, 2016), we measure contextuality within a cyclic system of random variables. Through two experiments, each with four context stimuli, we assess contextuality across various decision-making scenarios. Our results indicate the presence of "true" contextuality in global investment decisions, but not in US stock selections. We investigate the determinants of contextual preference formation, focusing on factors such as future return expectations, risk perception, and familiarity with stock markets and individual US stocks. Employing logistic regression analysis for the first two contexts, we find that preferences in foreign stock markets exhibit instability, indicating context-specific drivers. On the other hand, familiarity with individual companies and future return expectations consistently influence investment preferences in specific US stocks.

AB - This study investigates the role of contextuality in investment preference formation, specifically in global investments and major US stocks. Utilizing the "Contextuality by Default" framework (Dzhafarov and Kujala in PLoS ONE 8:e61712, 2013; J Math Psychol 74:11–33, 2016), we measure contextuality within a cyclic system of random variables. Through two experiments, each with four context stimuli, we assess contextuality across various decision-making scenarios. Our results indicate the presence of "true" contextuality in global investment decisions, but not in US stock selections. We investigate the determinants of contextual preference formation, focusing on factors such as future return expectations, risk perception, and familiarity with stock markets and individual US stocks. Employing logistic regression analysis for the first two contexts, we find that preferences in foreign stock markets exhibit instability, indicating context-specific drivers. On the other hand, familiarity with individual companies and future return expectations consistently influence investment preferences in specific US stocks.

UR - https://link.springer.com/article/10.1007/s10479-025-06630-8

U2 - 10.1007/s10479-025-06630-8

DO - 10.1007/s10479-025-06630-8

M3 - Article

SN - 0254-5330

JO - Annals of Operations Research

JF - Annals of Operations Research

ER -

Measuring contextuality in investment preferences

Abstract

Bibliographical note

Funding

Access to Document

Other files and links

Fingerprint

Cite this