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Over the last decade foreign bond portfolio positions in US dollar assets have risen above the reciprocal US investor positions in foreign currencies. In periods of increased economic uncertainty, institutional investors hedge their international bond positions, which creates a net hedging...
Persistent link: https://www.econbiz.de/10013440410
We experimentally test overconfidence in investment decisions by offering participants the possibility to substitute their own for alternative investment choices. Overall, 149 subjects participated in two experiments, one with just one risky asset, the other with two risky assets. Overconfidence...
Persistent link: https://www.econbiz.de/10011408444
We show theoretically that the weak transmission of beliefs to actions induces a strong bias in basic asset pricing tests. In particular, expected returns can appear to decline in risk when investors weakly transmit their payoff expectations into willingness to pay. We experimentally test this...
Persistent link: https://www.econbiz.de/10013440420
experience (i) greater loss aversion from paying taxes, and (ii) lower moral costs of evasion. We confirm the predictions of our … influence taxpayers decisions. Loss aversion, measured “directly” for the first time for each individual in an evasion … experiment, reduces evasion, as predicted by our theory. Loss aversion, risk aversion, and their interaction, are critical …
Persistent link: https://www.econbiz.de/10012294881
As predicted by loss aversion, numerous studies find that penalties elicit greater effort than bonuses, even when the … underlying payoffs are identical. However, loss aversion also predicts that workers will demand higher wages to accept penalty …, but do not significantly reverse it. Overall, loss aversion seems to play surprisingly little role in this setting. The …
Persistent link: https://www.econbiz.de/10011602519
versus loss frame) times two (monitored performance versus unmonitored performance) between-subjects design to examine …, the level of cheating is by far higher in the loss frame than in the gain frame. Furthermore, men are much more strongly …
Persistent link: https://www.econbiz.de/10010412075
of savings, precautionary savings, loss aversion, and risk. We provide the relevant theory, followed by empirical tests … based on subject-specific choices, and the measurement of subject-specific behavioral parameters such as loss aversion and … present bias. We predict, and show empirically, that loss aversion reduces savings, and that those who are more loss averse …
Persistent link: https://www.econbiz.de/10014315431
This study examines the impact of investors' buy and sell trades on Korean stock market volatility across two crisis events, the Asian crisis of 1997 and the 2008 global financial crash. We investigate the trading behaviour of domestic vs. foreign and institutional vs. individual investors. Our...
Persistent link: https://www.econbiz.de/10012138660
This paper documents that an appreciation of the U.S. dollar is associated with a reduction in the supply of commercial and industrial loans by U.S. banks. An increase in the broad dollar index by 2.5 points (one standard deviation) reduces U.S. banks' corporate loan originations by 10 percent....
Persistent link: https://www.econbiz.de/10011922169
This paper explores French assets returns predictability within a VAR setup. Using quarterly data from 1970Q4 to 2006Q4, it turns out that bonds, equities and bills returns are actually predictable. This feature implies that the investment horizon does indeed matter in the asset allocation. The...
Persistent link: https://www.econbiz.de/10003833321