This research investigates whether the financial literacy of individuals influences risk taking decisions and diversification behavior. This issue is relevant in that investors are increasingly in charge of their own financial security, but they have to deal with financial instruments whose...

We examine underlying factors that explain an exceptionally low stock market participation rate among Lithuanian households by carrying out a comprehensive survey of mass affluent individuals. The probit regression analysis of the survey results indicates that lack of financial literacy, low...

This study aims to determine the factors that affect financial literacy in Japan using data from Osaka University's Preference Parameter Study in Japan. We examined fourteen variables covering respondents' demographic, socio-economic, and psychological backgrounds drawn from social learning,...

Since the 1990s, the SEC has advocated for financial disclosures to be in "plain English" so that they would be more readable and informative. Past research has shown that high readability is related to more extreme investor judgments of firm performance. Processing fluency is the prevalent...

Previous research shows that many people seek financial advice from non-experts, and that peer interactions influence financial decisions. We investigate whether such influences are beneficial, harmful, or simply haphazard. In our laboratory experiment, face-to-face commu- nication with a...

A fund's performance is usually compared to the performance of an index or other funds. If a fund trails the benchmark, the fund manager is often replaced. We argue that this may lead to excessive risk-taking if fund managers differ in ability and have the opportunity to take excessive risk. To...

We present a model with dynamic investment flows, where fund managers have the ability to generate excess returns and study how forcing them to commit part or all of their personal wealth to the fund they manage affects fund risk taking. We contrast the behavior of a manager that may invest her...

The current study examines individual decision making in the fi eld of personal finance. How do people arrive at a financial decision? A laboratory experiment investigates the way external information is integrated into the decision making process. The objective is to explore the link between...

This study uses a national dataset to examine the association among risk tolerance, financial literacy, and goals-based savings behavior of households. The results indicate that three out of five households do not have any emergency funds set aside, and about half the households have not...