We report three repetitions of Falk and Kosfeld's (2006) low and medium control treatmentswith 364 subjects. Each repetition employs a sample drawn from a standard subject pool ofstudents and demographics vary across samples. Our results largely conict with those of theoriginal study. We mainly...

The Peter Principle states that, after a promotion, the observed output of promotedemployees tends to fall. Lazear (2004) models this principle as resulting from a regression tothe mean of the transitory component of ability...

This note reports a replication study of Falk and Kosfeld’s (2006) medium control treatment.In the experimental game, an agent has an endowment of 120 experimental currency units anddecides how much to transfer to a principal. For every unit that the agent gives up, the principalreceives two...

This paper investigates factors influencing individual portfolio allocations withparticular focus on the role of illusion of control. By forming their portfolio of tworisky lotteries and one risk-less alternative, subjects are requested to reach a targetinvestment profit, whereby equal...

Myopic loss aversion (MLA) has been established as one prominentexplanation for the equity premium puzzle. In this paper we address two issuesrelated to the effects of MLA on risky investment decisions. First, we assess therelative impact of feedback frequency and investment flexibility (via...

In this paper we relate individual risk attitude as elicited by binary lotteriesand certainty equivalents to market behavior. By analyzing 26 independentmarkets with a total of 280 participants we show that binary lottery choicesand certainty equivalents are poorly correlated. Only lottery...

This paper focuses on egocentric biases in financial decisions. Subjects first designa portfolio, whereby each combination of assets yields the same expected returnand variance of returns. They are then confronted with two alternative portfolios;the average portfolio and the portfolio of one’s...