This paper analyses the Business Angel (BA) portfolio of the European Angels Fund (EAF), an initiative of the European Investment Fund, which engages in co-investment relationships with experienced business angels across Europe. It uses EIF’s proprietary database to shed light on a specific...

This paper examines the relationship between overconfidence and losses from under-diversification among Dutch investors. We find that a lack of proper portfolio diversification is positively associated with overconfidence. Part of this relationship is mediated through the lower propensity of...

This research investigates whether the financial literacy of individuals influences risk taking decisions and diversification behavior. This issue is relevant in that investors are increasingly in charge of their own financial security, but they have to deal with financial instruments whose...

Household investment mistakes are an important concern for researchers and policymakers alike; portfolio underdiversification ranks among those mistakes that are potentially most costly. However, its roots and empirical importance are poorly understood. I estimate quantitatively meaningful...

Many financial situations present individuals with simple alternatives to solving complex problems. Are individuals sophisticated; do they know when they are better off opting out of complexity? We tested complexity's effects and evaluated sophistication in a large and diverse sample. We randomly...

Many financial situations present individuals with simple alternatives to solving complex problems. Are individuals sophisticated; do they know when they are better off opting out of complexity? We tested complexity's effects and evaluated sophistication in a large and diverse sample. We randomly...

Economic theory suggests that households should invest their financial wealth in a combination of cash and a well-diversified equity portfolio. Yet, many households' equity investments are strongly concentrated in a few assets. Attempts to explain this discrepancy have included low levels of...