Individual investors trade excessively, sell winners too soon, and overweight stocks with lottery features and low expected returns. This paper models a financial innovation to address these biases and improve individual investor performance. Individual investors pledge shares of stock to an...

I propose and model stock loan lotteries, a financial innovation that improves the welfare of individual investors. Stock loan lotteries are prize-linked payoffs using net rebates from securities lending. Stock loan lotteries motivate individual investors with prospect theory preferences to buy...

This paper employs a new empirical approach for eliciting preferences for and determinants of sustainable investments at the individual investor level. We examine data from an incentivized framed field experiment that was part of a representative survey among financial decision makers in German...

I propose and model a financial innovation, stock loan lotteries, that improves individual investor performance. Stock loan lotteries are prize-linked payoffs using net rebates from securities lending. Investors who receive lending fees structured as lottery payoffs are willing to hold risky...

Individual investors trade excessively, sell winners too soon, and overweight stocks with lottery features and low expected returns. This paper proposes and models a financial innovation, called stock loan lotteries, that improves individual investor performance. An individual investor signs a...

This paper investigates whether the overpricing of out-of-the money single stock calls can be explained by Tversky and Kahneman's (1992) cumulative prospect theory (CPT). We hypothesize that these options are expensive because investors overweight small probability events and overpay for...

This paper is the first to measure individual investors' realized risk-adjusted performance in structured financial products, which represent one of the key financial innovations in recent times. Based on a large database of trades and portfolio holdings for 10,652 retail investors in discount...

This paper analyzes the determinants of socially responsible investing (SRI) at the individual investor level. We examine data from an incentivized framed field experiment, which was part of a survey among a representative sample of financial decision makers in German households. Thus, we...

I exploit a natural experiment to show that household investment decisions depend on the manner in which information is displayed. Israeli retirement funds were prohibited from displaying returns for periods shorter than twelve months. In this setting, the information displayed was altered but...

Behavioral finance lacks direct evidence linking agents’ beliefs to their behaviors. Motivated by revealed preference theories, I provide such evidence using mutual fund stock holdings. Assuming that investors' expectations are consistent with their investment decisions, I relate fund...