Stakes and Mistakes

Steffen Andersen, Abhiroop Mukherjee, Kasper Meisner Nielsen*

*Corresponding author af dette arbejde

Publikation: KonferencebidragPaperForskningpeer review

Abstrakt

We provide causal evidence on one of the most prominent critiques of behavioral finance – that most of the evidence in psychology, which underpins the field, comes from experiments with little at stake for participants. How far do behavioral biases – leading to investment mistakes – get attenuated when stakes are raised? We study this issue by exploiting exogenous variation in stakes resulting from unexpected inheritances due to sudden parental death. We find that increasing stakes reduces investment mistakes, but this effect is economically small. Mistakes do not disappear when stakes are raised, even when this increase is substantial.
OriginalsprogEngelsk
Publikationsdato2021
Antal sider38
StatusUdgivet - 2021
BegivenhedThe Eighth Annual Asian Bureau of Finance and Economic Research. ABFER 2021 - Virtual, Singapore
Varighed: 24 maj 20212 jun. 2021
Konferencens nummer: 8
https://abfer.org/events/abfer-events/annual-conference/235:immb2021

Konference

KonferenceThe Eighth Annual Asian Bureau of Finance and Economic Research. ABFER 2021
Nummer8
LokationVirtual
LandSingapore
Periode24/05/202102/06/2021
Internetadresse

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