We design, field and exploit survey data from a representative sample of the French population to examine whether informative social interactions enter households'stockholding decisions. Re- spondents report perceptions about their circle of peers with whom they interact about financial matters,...

This paper exploits a natural experiment in India – Inflation Targeting to study how changes in inflation expectations influence households’ consumption, savings, and investments in risky assets. Using regional heterogeneity in inflation expectations by city and city-age-gender bins due to...

Do household inflation expectations affect portfolio choice? This paper exploits inflation experience as an instrumental variable for inflation expectations and links it to household portfolios. I document that households with higher inflation expectations are more likely to invest in equity...

We conduct a laboratory experiment to study whether people intuitively use real-option strategies in a dynamic investment setting. The participants were asked to play as an oil manager and make production decisions in response to a simulated mean-reverting oil price. Using cluster analysis,...

Financial disclosure documents provide investors with product details to facilitate informed investment decisions. We investigate whether the appearance - the visual frame - of disclosure documents impacts risk and return expectations and investment behavior. In our experiment, subjects decide...

Overall, 72 subjects invest their endowment in four risky assets. Each com-bination of assets yields the same expected return and variance of returns. Illusion of expertise prevails when one prefers nevertheless the self-selected portfolio. After being randomly assigned to groups of four...

We show that if an agent is uncertain about the precise form of his utility function, his actual relative risk aversion may depend on wealth even if he knows his utility function lies in the class of constant relative risk aversion (CRRA) utility functions. We illustrate the consequences of this...

Conventional wisdom suggests that optimism should be positively associated with risk taking. However, this has hardly been directly tested in the laboratory. In this paper, we report an experiment regarding risk perception and risk taking. Our data supports the hypothesis that two sufficient...

This paper deals with risk measurement and portfolio optimization under risk constraints. Firstly we give an overview of risk assessment from the viewpoint of risk theory, focusing on moment-based, distortion and spectral risk measures. We subsequently apply these ideas to an asset management...

Story-telling helps to define the human experience. Do people also use narratives to make sense of, and to act on, financial information? Three studies demonstrate that people's investment predictions and choices instead are by narrative thinking. Whereas neoclassical financial theory maintains...