The Impact of Investment Experience and Market Environment on Disposition Effect: A Case Study of CATL
Research Article
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The Impact of Investment Experience and Market Environment on Disposition Effect: A Case Study of CATL

Jiyuan Cheng 1*
1 Hong Kong Baptist University
*Corresponding author: 22258329@life.hkbu.edu.hk
Published on 19 November 2025
Volume Cover
AEMPS Vol.243
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-80590-557-8
ISBN (Online): 978-1-80590-558-5
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Abstract

Disposal effect is one of the classic behavioural biases in behavioural finance. The research system on this phenomenon is already quite complete, but few articles focus on the impact of investors' own experiences and the overall market environment on the disposal effect. This paper will fill this gap and take the stock of Contemporary Amperex Technology Co., Limited (CATL) as a case study. CATL is divided into three major stages: 2020-2021, the period of soaring stock price; 2021-2022, the period of stock price fluctuation; 2022-2024, the period of continuous decline in stock price. Three research methods are adopted respectively to collect the emotional feedback of investors in the stock forum, analyse the stock trading data, and infer the intensity of the disposal effect of investors in different periods by calculating the difference between realized profit ratio (PGR) and realized loss ratio (PLR) and the change of margin trading balance with the stock price. It also supplements the explanation of the impact of investment experience and market environment on the disposal effect, and studies the underlying mechanism. Finally, it is found that there is a non-linear correlation between the two, and the mechanism of the disposal effect mainly lies in the overconfidence and risk aversion in investors' psychology.

Keywords:

Investment experience, market environment, disposition effect, CATL

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Cheng,J. (2025). The Impact of Investment Experience and Market Environment on Disposition Effect: A Case Study of CATL. Advances in Economics, Management and Political Sciences,243,9-16.

References

[1]. Fan, Z. & Neupane, S. (2024) Investor Horizon, Experience, and the Disposition Effect. Journal of Behavioral and Experimental Finance, 44, 101-103.

[2]. Cheng, T.Y., Lee, C.I. & Lin, C.H. (2024) Dissecting the Links among Profitability, the Disposition Effect, and Trading Activity. Pacific-Basin Finance Journal, 83, 102-197.

[3]. Ahn, Y. (2022) The Anatomy of the Disposition Effect: Which Factors Are Most Important? Finance Research Letters, 44, 102-104.

[4]. Jin, X.J., Li, H.Z., Yu, B. & Zheng, Y.J. (2023) How Does the COVID-19 Pandemic Change the Disposition Effect in Fund Investors? Pacific-Basin Finance Journal, 81, 102119.

[5]. Han, G.M. & Preda, A. (2025) Does Home Bias Amplify the Disposition Effect? Evidence from Retail Forex Trading. Finance Research Letters, 108-126.

[6]. Wang, K.M., Zhang, G.L. & Zhou, L. (2023) Managerial Disposition Effect: Evidence from China. Pacific-Basin Finance Journal, 78, 101-109.

[7]. Heinke, S., Olschewski, S. & Rieskamp, J. (2024) Experiences, Demand for Risky Investments, and Implications for Price Dynamics. Journal of Behavioral and Experimental Finance, 43, 100-109.

[8]. Zhang, X.T., Wang, Z.Q., Hao, J. & Liu, J.B. (2022) Stock Market Entry Timing and Retail Investors' Disposition Effect. International Review of Financial Analysis, 82, 102-205.

[9]. Wu, J.W., Wang, C.Y., Chen, Z.L. et al. (2020) Disposition Effect of Chinese Individual Investors: A Perspective of Irrational Belief. Journal of Financial Research, 2, 147-166.

[10]. Zhao, W.Q. (2020) Research on the Disposition Effect of Investors in China's Growth Enterprise Market. Economic Research Guide, 10, 73-80.

References

[1]. Fan, Z. & Neupane, S. (2024) Investor Horizon, Experience, and the Disposition Effect. Journal of Behavioral and Experimental Finance, 44, 101-103.

[2]. Cheng, T.Y., Lee, C.I. & Lin, C.H. (2024) Dissecting the Links among Profitability, the Disposition Effect, and Trading Activity. Pacific-Basin Finance Journal, 83, 102-197.

[3]. Ahn, Y. (2022) The Anatomy of the Disposition Effect: Which Factors Are Most Important? Finance Research Letters, 44, 102-104.

[4]. Jin, X.J., Li, H.Z., Yu, B. & Zheng, Y.J. (2023) How Does the COVID-19 Pandemic Change the Disposition Effect in Fund Investors? Pacific-Basin Finance Journal, 81, 102119.

[5]. Han, G.M. & Preda, A. (2025) Does Home Bias Amplify the Disposition Effect? Evidence from Retail Forex Trading. Finance Research Letters, 108-126.

[6]. Wang, K.M., Zhang, G.L. & Zhou, L. (2023) Managerial Disposition Effect: Evidence from China. Pacific-Basin Finance Journal, 78, 101-109.

[7]. Heinke, S., Olschewski, S. & Rieskamp, J. (2024) Experiences, Demand for Risky Investments, and Implications for Price Dynamics. Journal of Behavioral and Experimental Finance, 43, 100-109.

[8]. Zhang, X.T., Wang, Z.Q., Hao, J. & Liu, J.B. (2022) Stock Market Entry Timing and Retail Investors' Disposition Effect. International Review of Financial Analysis, 82, 102-205.

[9]. Wu, J.W., Wang, C.Y., Chen, Z.L. et al. (2020) Disposition Effect of Chinese Individual Investors: A Perspective of Irrational Belief. Journal of Financial Research, 2, 147-166.

[10]. Zhao, W.Q. (2020) Research on the Disposition Effect of Investors in China's Growth Enterprise Market. Economic Research Guide, 10, 73-80.

Cite this article

Cheng,J. (2025). The Impact of Investment Experience and Market Environment on Disposition Effect: A Case Study of CATL. Advances in Economics, Management and Political Sciences,243,9-16.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of CONF-BPS 2026 Symposium: Innovation, Finance, and Governance for Sustainable Global Growth

ISBN: 978-1-80590-557-8(Print) / 978-1-80590-558-5(Online)
Editor: Canh Thien Dang, Li Chai
Conference website: https://www.confbps.org/Beijing.html
Conference date: 5 March 2026
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.243
ISSN: 2754-1169(Print) / 2754-1177(Online)

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