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The promises and pitfalls of robo-advising

D'Acunto, Francesco; Prabhala, Nagpurnanand R.; Rossi, … - 2018

We study a robo-advising portfolio optimizer that constructs tailored strategies based on investors' holdings and preferences. Adopters are similar to non-adopters in terms of demographics, but have more assets under management, trade more, and have higher risk-adjusted performance. The...

Persistent link: https://www.econbiz.de/10011795044

The trading response of individual investors to local bankruptcies

Laudenbach, Christine; Loos, Benjamin; Pirschel, Jenny; … - 2020

We use data from a German online brokerage and a survey to show that retail investors sharply reduce risk-taking in response to nearby firm bankruptcies, which are not predictive of returns. The effects on trading are spatially highly concentrated, immediate and not persistent. They seem to...

Persistent link: https://www.econbiz.de/10012195959

Optimal illusions and decisions under risk

Gollier, Christian (contributor) - 2005

subjective beliefs on the distribution of returns. However, the bias of these endogenous subjective beliefs induces the choice of …

Persistent link: https://www.econbiz.de/10002572472

Paralyzed by shock and confused by glut : the portfolio formation behavior of peer-to-business lending investors

Dorfleitner, Gregor; Hornuf, Lars; Weber, Martina - 2018

biases - a default shock bias and a deep market bias. First, we find investors to stop investing in new loans and to cease … default shock bias, investors cease from investing in new loans and consequently underdiversify their portfolios as more loans …, investment experience on the platform reduces the effect of the deep market bias. …

Persistent link: https://www.econbiz.de/10011863582

Climate policy, stranded assets, and investors' expectations

Sen, Suphi; Schickfus, Marie-Theres von - 2019

Climate policies to keep global warming below 2 degree celsius might render some of the world fs fossil fuels and related infrastructure worthless prior to the end of their economic life time. Therefore, some energy-sector assets are at risk of becoming stranded. This paper investigates whether...

Persistent link: https://www.econbiz.de/10012123063

Insensitive investors

Charles, Constantin; Frydman, Cary; Kilic, Mete - 2022

We show theoretically that the weak transmission of beliefs to actions induces a strong bias in basic asset pricing …

Persistent link: https://www.econbiz.de/10013440420

Misperceived returns to active investing

Haaland, Ingar; Naess, Ole-Andreas Elvik - 2023

We conduct field experiments with retail investors recruited from a social trading platform. In our main experiment, we first elicit beliefs about the returns to active investing. We then generate exogenous variation in beliefs by providing treated respondents with information about index funds...

Persistent link: https://www.econbiz.de/10013536190

Disposed to be overconfident

Gödker, Katrin; Odean, Terrance; Smeets, Paul - 2023

We show that the disposition effect-the tendency of investors to hold losers and sell winners-can be a source of overconfidence. We find experimental evidence that individuals update beliefs about their own investment ability based on realized gains and losses rather than the overall performance...

Persistent link: https://www.econbiz.de/10014251033

I care what you think : social image concerns and the strategic revelation of past pro-social behavior

Siemens, Ferdinand von - 2019

This article studies whether people want to control which information on their own past pro-social behavior is revealed to other people. Participants in an experiment are assigned a color which depends on their own past pro-sociality. They can then spend money to increase or decrease the...

Persistent link: https://www.econbiz.de/10011966892

Domestic banks as lightning rods? : home bias and information during the Eurozone Crisis

Saka, Orkun - 2019 - This Draft: September, 2019

banks’ private sector exposures were (at least) equally affected by the rise in home bias. Consistent with this pattern, I …

Persistent link: https://www.econbiz.de/10012123037