Investors may be unaware of the high risk associated with a high-return financial product and thus may purchase risky products inconsistent with their risk attitudes. We conducted an experiment and survey in Shenzhen, China, to measure individuals' risk preferences, financial literacy, and the...

This paper is the first to use the WeChat platform, one of the largest social networks, to conduct an online experiment of artificial investment games. We investigate how people's forecasts about the financial market and investment decisions are shaped by whether they can observe others'...

The sunk cost effect has been widely observed in individual decisions. Building on an intra-personal self-management game, the paper theoretically shows that the sunk cost effect may stem from an attempt to overcome the under-investment problem associated with a high degree of present bias or to...

We incorporate unawareness into the delegation problem between a financial expert and an investor, and study their pre-delegation communication. The expert has superior awareness of the possible states of the world, and decides whether to reveal some of them to the investor. We find that the...

The paper points out a potential gap between intertemporal choices and time preference: The observed intertemporal decisions could be partly driven by a biased perception of time, and thus may not completely reveal the actual time preference. To test this conjecture, we explore the relationship...