We show that constraints can improve financial decision-making by disciplining behavioral biases. In financial markets, restrictions on leverage limit traders’ ability to borrow to open new positions. We demonstrate that regulation that restricts the provision of leverage to retail traders improves trading performance. By increasing the opportunity cost of postponing the realization of losses, leverage constraints improve traders’ market timing and reduce their disposition effect. We replicate these findings in two distinct experimental settings, further isolating the mechanism and demonstrating generality of the results. The interaction between constraints and behavioral biases has implications for policy and choice architecture.

中文翻译：

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选择偏向：财务约束如何减少财务错误

我们表明，约束可以通过约束行为偏差来改善财务决策。在金融市场中，杠杆限制限制了交易者借入新仓位的能力。我们证明了限制向零售交易者提供杠杆的监管可以提高交易业绩。通过增加延迟实现损失的机会成本，杠杆约束改善了交易者的市场时机并降低了他们的处置效应。我们在两个不同的实验环境中复制了这些发现，进一步分离了机制并证明了结果的普遍性。约束和行为偏见之间的相互作用对政策和选择架构有影响。