This paper investigates two research questions: Do investors see a relationship between risk attitude and the amount invested risky? Further, do investors adjust their investments if provided with assets with different volatilities? In an experimental study, investors allocate an amount between...

We experimentally study how presentation formats for return distributions affect investors' diversification choices. We find that sampling returns alleviates correlation neglect and constitutes an effective way to improve financial decisions. When participants get a description of probabilities...

When faced with the challenge of forming a portfolio containing a risky and a risk-free asset, investors tend to apply the same portfolio weights independently of the volatility of the risky asset. This “percentage heuristic” can lead to different levels of portfolio risk when the same...

Hier erläutern Finanzwissenschaftler und Professoren/Professorin anhand eines Lebenszyklusmodells wie sparen und entsparen gestaltet werden können. Dabei legen sie theoretischen Überlegungen und Ergebnisse aus Forschung und Wissenschaft zugrunde, die dem Privatanleger die letztendlich...

Financial professionals have a great deal of discretion concerning how to relay information about the risk of financial products to their clients. This paper introduces a new risk tool to communicate the risk of investment products and examines how different risk presentation modes influence...

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...