Overconfidence, Financial Advice Seeking and Household Portfolio Under-Diversification

Broekema, Stijn P. M.; Kramer, Marc

doi:10.3390/jrfm14110553

Cited by 3 publications

(2 citation statements)

References 42 publications

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“…For farm-to-processor transportation emissions, we assume that raw milk is transported from dairy farms to the processing plants by unrefrigerated insulated tank trucks, , and the emissions of transportation are dominated by tailpipe emissions. The average trip distance per raw milk collection route is assumed to be 100 km . Emissions from the processing stage derive mainly from energy use.…”

Section: Methods and Datamentioning

confidence: 99%

Dairy Trade Helps to Alleviate Global Carbon Emission Pressure

Mao

et al. 2022

Environ. Sci. Technol.

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Global dairy production, consumption, and trade are growing rapidly, driven by population and per capita income growth and increasing health concerns mainly from developing countries, which has aroused concerns about the related carbon emission (mostly in the form of methane) increase. If all of the dairy products consumed were produced locally/domestically in the developing countries/economies (a counterfactual scenario), the carbon emissions in 2018 would be 28 Mt CO2-equiv higher than its status quo (a factual scenario). The present study indicates that unlike in many global trade cases in which carbon leakages are from developed to developing countries, global dairy trade is characterized by net embodied carbon flows from developed to developing countries/economies due to the fact that there is an overwhelming one-way-flow of dairy products from developed to developing countries/economies. The differences in the carbon emission factors between the developed and developing countries/economies provide an opportunity that global dairy trade and production specialization can help to reduce carbon emissions from increasing dairy product demand, and the total reduction potential is estimated to be about 414 Mt CO2-equiv from 2018 to 2030. Free trade agreements such as the Regional Comprehensive Economic Partnership will incentivize larger carbon emission reduction benefits through promoting dairy trade.

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Section: Methods and Datamentioning

confidence: 99%

Dairy Trade Helps to Alleviate Global Carbon Emission Pressure

Mao

et al. 2022

Environ. Sci. Technol.

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“…As initially stated, little is known about the effect of joint financial decision-making on investor overconfidence. That said, two recent studies suggest that advice aversion in finance is associated with higher overconfidence among Dutch and older Spanish investors (Broekema and Kramer 2021;Garc ıa, G omez, and Vila 2022). Since those who refrain from involving others in their financial decisions are more overconfident, it is hypothesized that H1: Joint financial decision-making decreases investor overconfidence when compared to lone financial decisionmaking.…”

Section: Conceptual Framework and Hypothesesmentioning

confidence: 99%

The One-Man Show: The Effect of Joint Decision-Making on Investor Overconfidence

Piehlmaier¹

2022

Journal of Consumer Research

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This study examines the impact of shared decision-making on investor overconfidence. Data from 2,000 investors, 6,394 consumers, and 657 experimental participants shed light on whether consumers who engage in joint financial decision-making are less affected by investor overconfidence than those who decide on their own. The findings show that investors who jointly decide are substantially less overconfident. However, family- or friend-inclined interactions are more effective in reducing overconfidence than relying on a financial advisor. The current research theoretically argues and empirically shows that shared metaknowledge drives this diminishing effect by highlighting unknown aspects of a financial decision. Compared to providing investors with solutions, problem reformulation, validation, or legitimation, only metaknowledge consistently decreases overconfidence in joint financial decision-making. It is argued that the process of highlighting unknowns can explain why interactions with family and friends have a more pronounced impact on investor overconfidence than consulting a professional advisor. The study provides a feasible debiasing tool to consumers, financial institutions, and other financial service providers to decrease overconfidence by emphasizing unknown aspects of an investment toward improving the quality of a consumer’s financial decisions under uncertainty.

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Advisors for micro-entrepreneurs: is one as good as another in accessing alternative finance?

Soana,

Cucinelli,

Ronchini

2024

Small Bus Econ

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Using a novel large database of Italian micro-entrepreneurs, we investigate how different sources of external business advice affect access to alternative finance. We distinguish three categories of external business advice: professional financial, professional non-financial, and non-professional. We also test whether financial knowledge of micro-entrepreneurs enhances their advice seeking for financial decision-making. We find that the use of alternative financial instruments increases when external business advisors are used, but some are more useful than others. Only professional financial advice is shown to increase the probability of accessing alternative finance by micro-enterprises, while non-professional and professional non-financial advice does not have the same effect. We also find that being more financially literate increases the probability that micro-entrepreneurs seek advice from highly professional sources, i.e., objective financial knowledge helps shape the quality of financial advice requested.

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Overconfidence, Financial Advice Seeking and Household Portfolio Under-Diversification

Cited by 3 publications

References 42 publications

Dairy Trade Helps to Alleviate Global Carbon Emission Pressure

Dairy Trade Helps to Alleviate Global Carbon Emission Pressure

The One-Man Show: The Effect of Joint Decision-Making on Investor Overconfidence

Advisors for micro-entrepreneurs: is one as good as another in accessing alternative finance?

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