Until recently we have known little about how core decision processes change with age and how aging may impact the structure and function of corresponding ventromedial frontostriatal neural systems (Samanez-Larkin & Knutson, 2014). The chapter begins by briefly orienting the reader to...

As the global population ages, older decision makers will be required to take greater responsibility for their own physical, psychological and financial well-being. With this in mind, researchers have begun to examine the effects of ageing on decision making and associated neural circuits. A new...

Mutual funds hold 32% of the U.S. equity market and comprise 58% of retirement savings, yet retail investors consistently make poor choices when selecting funds. Theory suggests that poor choices are partially due to mutual fund managers creating unnecessarily complex disclosures and fee...

Using detailed micro-level data, we show that individuals' beliefs about climate change influence their choice and level of flood insurance coverage. Our empirical strategy exploits the heterogeneous impact of widening partisan polarization on climate change beliefs after the 2016 general...

This paper studies how peers' financial behaviour affects individuals' own investment choices. To identify the peer effect, we exploit the unique composition of the Luxembourg population and use the differences in stock market participation across various immigrant groups to study how they...

This paper establishes a causal relation between an individual's decision of whether to own stocks and average stock market participation decision of the individual's community. We instrument for the average ownership of an individual's community with lagged average ownership of the states in...

Financial knowledge and the investment in information of retail investors have been under scrutiny on the side of regulators and of academics. Actually, increasing financial literacy of individuals is one of the promising avenues in order to increase financial markets participation. In this...

Exploiting the German reunification, we study how households adapt to a new environment in their macroeconomic forecasting. East Germans expect higher inflation than West Germans decades after reunification. These differences are likely driven by the persistent effect of the inflation shock...

Using a representative online panel from the US, we examine how individuals' macroeconomic expectations causally affect their personal economic prospects and their behavior. To exogenously vary respondents' expectations, we provide them with different professional forecasts about the likelihood...

We show that individuals' macroeconomic expectations are influenced by their socioeconomic status (SES). People with higher income or higher education are more optimistic about future macroeconomic developments, including business conditions, the national unemployment rate, and stock market...