Reasons of employees investing in their company's stock

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  1. Familiarity and overconfidence
  2. Representativeness: naively extrapolate past good performance into expectations
  3. Framing: employer's contribution in stock instead of cash is seen as an implicit recommendation of the quality of the stock as an investment
  4. Loyalty: hold the stock in an effort to help the company
  5. Financial incentives: tax incentives or allowed to purchase the stock at a discount



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