Excessive Volatility is Also a Feature of Individual Level Forecasts

Nursimulu, Anjali; Bossaerts, Peter

doi:10.1080/15427560.2014.877016

Cited by 5 publications

(4 citation statements)

References 15 publications

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“…Most previous studies suggested that people in the gain domain become less risk averse under time pressure compared with under low or no time pressure. This conclusion was based on choice proportions directly (Madan et al, 2015;Saqib & Chan, 2015), on modeling of certainty equivalents with cumulative prospect theory (Young et al, 2012), or on modeling behavior in a card game with a meanvariance model and cumulative prospect theory (Nursimulu & Bossaerts, 2014). Yet some studies did not find evidence for a preference shift in the gain domain: in one study, this inference was based on a preference rating of risky scenarios (Maule et al, 2000).…”

Section: Preference Shiftsmentioning

confidence: 99%

Distinguishing three effects of time pressure on risk taking: Choice consistency, risk preference, and strategy selection

Olschewski

Rieskamp

2021

Behavioral Decision Making

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Quick decision making under risk is ubiquitous in modern times, yet its consequences are not fully understood. Time pressure might change people's risk preferences, lead to less consistent choices, or change people's decision strategy. With the present work, we make the novel contribution of testing all hypotheses against each other in a unifying hierarchical Bayesian model. In two studies, participants decided repeatedly between two risky gambles either with or without high time pressure. We found a significant increase in risky choices under time pressure. With modeling, we show that time pressure decreased choice consistency but did not systematically affect people's risk preferences. In addition, the number of participants using simple, noncompensatory strategies increased slightly under time pressure. Finally, participants did not systematically choose easier gambles more often under time pressure. Thus, a reliable analysis of the effect of time pressure on preferential choice requires a model framework that allows for the distinction between the various effects time pressure can have.

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Section: Preference Shiftsmentioning

confidence: 99%

Distinguishing three effects of time pressure on risk taking: Choice consistency, risk preference, and strategy selection

Olschewski

Rieskamp

2021

Behavioral Decision Making

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“…In Cluster 3, four documents were grouped and 34 citations were obtained. The paper by Nursimulu and Bossaerts (2014;Node 12) had 13 citations (38.24% of the cluster's citations) and Bateman et al (2015;Node 14) presented eight relational ties. Cluster 3 approached the taxes aversion bias that affects assets, volatility, and risk preferences based on investor demographics.…”

Section: Analyses Of Author's Cocitation and Bibliographic Couplingmentioning

confidence: 99%

Behavioral Finance Experiments: A Recent Systematic Literature Review

2020

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This article aims to elaborate a systematic literature review (SLR) on the subject of experiments in behavioral finance, including papers published between 2014 and 2018. Methodology involved the careful selection of articles published in Web of Science and Scopus databases, and bibliometric analysis was applied. Final sample included 60 articles, the Journal of Behavioral Finance was the most productive journal and the majority of the 152 authors worked in the Americas. For cocitation, important authors, such as Kahneman and Tversky and Barber and Odean were among the most cited and with greater relational ties. For bibliographic coupling, Bursztyn et al. and Bigelow et al. were the most cited, whereas Kadous et al. presented more relational ties. The research contribution lies in the application of the SLR to a growing research area, allowing to know the most relevant subjects, articles, journals, authors, and countries in the area nowadays.

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“…Studies report that analysts’ forecast bias has an influence over rational evaluation of the available market information. Excessive volatility in individual level forecasts also affects financial forecasting (Nursimulu and Bossaerts, 2014). Li and Wu (2014) use quantile regression to gauge the association between analysts’ forecast dispersion and subsequent stock returns.…”

Section: Behavioral Finance Indicators At the Aggregate Level – Does Rationality Exist?: Contradictory Evidencementioning

confidence: 99%

Behavioral mediators of financial decision making – a state-of-art literature review

Nigam

Srivastava

Banwet

2018

RBF

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Purpose The purpose of this paper is to review the insights provided by behavioral finance studies conducted in the last decade (2006-2015) examining behavioral variables in financial decision making. Design/methodology/approach The literature review assesses 623 qualitative and quantitative studies published in various international refereed journals and identifies possible scope of future work. Findings The paper identifies stock market anomalies which contradict rational agents of modern portfolio theory at an aggregate level and behavioral mediators, influencing the financial decision making at an investor level. The paper also attempts to classify different dimensions of risk as professed by the investor. Originality/value The authors synthesize the contribution made by behavioral finance studies in extending the knowledge of financial market and investor behavior.

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Excessive Volatility is Also a Feature of Individual Level Forecasts

Cited by 5 publications

References 15 publications

Distinguishing three effects of time pressure on risk taking: Choice consistency, risk preference, and strategy selection

Distinguishing three effects of time pressure on risk taking: Choice consistency, risk preference, and strategy selection

Behavioral Finance Experiments: A Recent Systematic Literature Review

Behavioral mediators of financial decision making – a state-of-art literature review

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