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Unemployment and portfolio choice: Does persistence matter?

Kuzin, Vladimir N.; Bremus, Franziska M. - 2010

We use a life cycle model of consumption and portfolio choice to study the effects of social security on the investment decisions of households for the European case. Our model is mainly based on the one developed by Cocco, Gomes, and Maenhout (2005). We extend it by unemployment risk using...

Persistent link: https://www.econbiz.de/10010291783

Financial risk aversion and household asset diversification

Barasinska, Nataliya; Schäfer, Dorothea; Stephan, Andreas - 2008

This paper explores the relationship between risk attitude and asset diversification in household portfolios. We first examine the impact of manifested risk aversion on the total number of distinct assets held in a portfolio (naive diversification). The second part of the paper focuses on a more...

Persistent link: https://www.econbiz.de/10010291769

Differential income taxation and household asset allocation

Ochmann, Richard - 2010

This paper empirically investigates the effects of differential income taxation on households' portfolio choice and asset allocation applying a two-stage budgeting model of asset demand to German survey data. The model is structured into the discrete asset choice and the continuous asset choice,...

Persistent link: https://www.econbiz.de/10010285730

The non-linear impact of risk tolerance on entrepreneurial profit and business survival

Koch, Melanie; Menkhoff, Lukas - 2024

Entrepreneurs tend to be risk tolerant but is more risk tolerance always better? In a sample of about 2,100 small businesses, we find an inverted U-shaped relation between risk tolerance and profitability. This relationship holds in a simple bilateral regression and also when we control for a...

Persistent link: https://www.econbiz.de/10014474979

Determinants of stock market participation

Menkhoff, Lukas; Westermann, Jannis - 2024

The low degree of stock market participation (SMP) is one of the big puzzles in finance. Numerous determinants have been proposed. We put these determinants into a structure that is derived from a standard static portfolio model. Then we discuss arguments put forward regarding specific SMP...

Persistent link: https://www.econbiz.de/10014530297

Earn more tomorrow: Overconfidence, income expectations and consumer indebtedness

Grohmann, Antonia; Menkhoff, Lukas; Merkle, Christoph; … - 2023

This paper examines whether biased income expectations due to overconfidence lead to higher levels of debt-taking. We … show suggestive evidence for a link between overconfidence and borrowing behavior in a representative survey of German …, participants can purchase goods by borrowing against their future income. We exogenously manipulate overconfidence about income …

Persistent link: https://www.econbiz.de/10014474949

Bad luck or bad decisions? Macroeconomic implications of persistent heterogeneity in cognitive skills and overconfidence

Pfäuti, Oliver; Seyrich, Fabian; Zinman, Jonathan - 2024

constrained decreases with cognitive skills and increases with overconfidence thereon. Guided by this and other micro evidence, we … add persistent heterogeneity in cognitive skills and overconfidence to an otherwise standard HANK model. Overconfidence …

Persistent link: https://www.econbiz.de/10014530295

Entrepreneurial Overconfidence: Evidence from a C.A.R.T. Approach

Köllinger, Philipp; Minniti, Maria; Schade, Christian - 2005

We use a sample of 18 countries to study what variables have a significant impact on an indi-vidual?s decision to start a new business and classification and regression trees for an accurate interpretation of the data. Our results support existing literature suggesting the existence of strong...

Persistent link: https://www.econbiz.de/10010260829

"I think I can, I think I can": Overconfidence and Entrepreneurial Behavior

Koellinger, Philipp; Minniti, Maria; Schade, Christian - 2005

Many firms fail shortly after inception. Yet individuals continue starting businesses. Prewar economists such as Keynes invoked animal spirits and stressed psychological factors in their explanations of economic behavior. Using a large sample obtained from surveys conducted in 18 countries, we...

Persistent link: https://www.econbiz.de/10010292631

Uncertainty Determinants of Corporate Liquidity

Baum, Christopher F.; Caglayan, Mustafa; Stephan, Andreas; … - 2006

This paper investigates the link between the optimal level of non-financial firms? liquid assets and uncertainty. We develop a partial equilibrium model of precautionary demand for liquid assets showing that firms alter their liquidity ratio in response to changes in either macroeconomic or...

Persistent link: https://www.econbiz.de/10010260989