Passive Aggressive: Index-Linked Securities and Individual Investors

Bhattacharya, Utpal; Hackethal, Andreas; Kaesler, Simon; Loos, Ben; Meyer, S.

doi:10.2139/ssrn.2022442

Cited by 6 publications

(5 citation statements)

References 40 publications

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“…6 This allows us to generate a heterogeneous sample in several sociodemographic characteristics. Furthermore, we ask the participants about their sociodemographics and elicit their choices in the HL-lottery and the e100,000 question.…”

Section: Part 1: Surveysmentioning

confidence: 99%

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Does Good Advice Come Cheap? –– On the Assessment of Risk Preferences in the Lab and the Field

Leuermann¹,

Roth²

2012

SSRN Journal

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Advice is important for decision making, especially in the financial sector. We investigate how individuals assess risk preferences of others given sociodemographic information or pictures. Both non-professionals and financial professionals participate in this artefactual field experiment.Subjects mainly rely on the other's self-assessment of risk preferences and on gender when forming the belief about someone else's risk preferences. On average, subjects consider themselves to be more risk-tolerant than the person they evaluate. Subjects use their own risk attitude as a reference point for predicting others' risk preferences. This false consensus effect is less pronounced for young professionals than for senior and non-professionals. Furthermore, financial professionals predict risk preferences more accurately compared to non-professionals.Classification: Risk Preferences, Financial Advice, Artefactual Field Experiment, Behavioral Finance JEL-Codes: C91, D81, G02 * We would like to thank Bodo Aretz, Alessandra Donini, Sarah Necker, Andreas Roider, Wendelin Schnedler and Andrew Schotter for their valuable comments and suggestions. We gratefully acknowledge the comments of the participants of the seminar at Heidelberg and Cologne University, the 2012 IIOC in Arlington, the SMYE in Mannheim, the Conference on Risk and Social Preferences in Maastricht and the FUR XV in Atlanta. We also want to thank Christoph Lukes for programming the experiment.

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Section: Part 1: Surveysmentioning

confidence: 99%

“…Thus, individuals are increasingly relying on professionals -such as financial consultants, insurance agents, but also doctors in the health domain -when making their decisions (c.f. Allen 2001, Bhattacharya et al 2012). An integral determinant of individuals' decision making are their risk preferences.…”

Section: Introductionmentioning

confidence: 99%

Does Good Advice Come Cheap? –– On the Assessment of Risk Preferences in the Lab and the Field

Leuermann¹,

Roth²

2012

SSRN Journal

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“…The lab experiment consists of the treatments SELF, SINGLE and SIMULT. 5 Subjects participating in the first 5 The instructions of both parts of the experiment can be found in the appendix.…”

Section: Experimental Designmentioning

confidence: 99%

“…Your Decision I choose option B the first time in row: (Please choose: 1,2,3,4,5,6,7,8,9,10) By clicking on NEXT your choices are saved. You cannot change your choices afterwards.…”

Section: Your Compensationmentioning

confidence: 99%

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Stereotypes and Risk Attitudes: Evidence from the Lab and the Field

Leuermann¹,

Roth²

2012

SSRN Journal

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Recent studies have found correlations between risk attitudes and several sociodemographic characteristics. In this paper, we deploy an artefactual field experiment and study whether subjects -non-professionals and financial professionals -are aware of these correlations. This is largely confirmed by our results for all subject groups. We show that the subjects attach informational value to sociodemographic information when assessing others' risk attitudes. This provides external validity to the correlations found between risk preferences and sociodemographics. A person's self-assessment of risk attitudes is the most helpful device for the subjects' assessments of others, although experienced professionals make use of it to a minor extent than all other subjects.

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A Brief Guide on Exchanged Traded Products (ETPs)

Orlando

2013

SSRN Journal

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Passive Aggressive: Index-Linked Securities and Individual Investors

Cited by 6 publications

References 40 publications

Does Good Advice Come Cheap? –– On the Assessment of Risk Preferences in the Lab and the Field

Does Good Advice Come Cheap? –– On the Assessment of Risk Preferences in the Lab and the Field

Stereotypes and Risk Attitudes: Evidence from the Lab and the Field

A Brief Guide on Exchanged Traded Products (ETPs)

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