The Role of Experience Sampling and Graphical Displays on One's Investment Risk Appetite

Published Online:https://doi.org/10.1287/mnsc.1120.1607

References

  • Abdellaoui M, L'Haridon O, Paraschiv C. Experienced vs. described uncertainty: Do we need two prospect theory specifications? Management Sci. (2011) 47(10):1879–1895LinkGoogle Scholar
  • Ameriks J, Zeldes S. How do household portfolio shares vary with age? (2004) . Working paper, Columbia Business School, Columbia University, New YorkGoogle Scholar
  • Andersen S, Nielsen KM. Participation constraints in the stock market: Evidence from unexpected inheritance due to sudden death. Rev. Financial Stud. (2011) 24(5):1667–1697CrossrefGoogle Scholar
  • Arrow KJ. Essays in the Theory of Risk-Bearing (1971) (North-Holland Publishing Company, Amsterdam-London) Google Scholar
  • Baron J, Hershey JC. Outcome bias in decision evaluation. J. Personality Soc. Psych. (1988) 54(4):569–579CrossrefGoogle Scholar
  • Barron G, Erev I. Small feedback-based decisions and their limited correspondence to description-based decisions. J. Behavioral Decision Making (2003) 16(3):215–233CrossrefGoogle Scholar
  • Benartzi S, Thaler R. Risk aversion or myopia? Choices in repeated gambles and retirement investments. Management Sci. (1999) 45(3):364–381LinkGoogle Scholar
  • Beshears J, Choi J, Laibson D, Madrian M. Can psychological aggregation manipulations affect portfolio risk-taking? Evidence from a framed field experiment. (2011) . NBER Working Paper 16868, National Bureau of Economic Research, Cambridge, MAGoogle Scholar
  • Campbell JY. Household finance. J. Finance (2006) 61(4):1553–1604CrossrefGoogle Scholar
  • DAI (2011) . DAI Factbook 2011, http://www.dai.de/internet/dai/dai-2-0.nsf/dai_statistiken.htmGoogle Scholar
  • European Parliament and European Council Markets in financial instruments directive. (2004) . Directive 2004/39/ECGoogle Scholar
  • Fox CR, Hadar L. Decisions from experience = sampling error + prospect theory: Reconsidering Hertwig et al. (2004). Judgment Decision Making (2006) 1(2):159–161Google Scholar
  • Glaser M, Weber M, Baker HK, Nofsinger J. Overconfidence. Behavioral Finance: Investors, Corporations, and Markets (2010) (John Wiley & Sons., Hoboken, NJ) 241–258Google Scholar
  • Goldstein DG, Johnson EJ, Sharpe WF. Choosing outcomes versus choosing products: Consumer-focused retirement investment advice. J. Consumer Res. (2008) 35(3):440–456CrossrefGoogle Scholar
  • Gomes FJ, Michaelides A. Optimal life-cycle asset allocation: Understanding the empirical evidence. J. Finance (2005) 60(2):869–904CrossrefGoogle Scholar
  • Hadar L, Fox CR. Information asymmetry in decision from description versus decision from experience. Judgment Decision Making (2009) 4(4):317–325Google Scholar
  • Haliassos M, Michaelides A. Portfolio choice and liquidity constraints. Internat. Econom. Rev. (2003) 44(1):143–177CrossrefGoogle Scholar
  • Hanoch Y, Johnson JG, Wilke A. Domain specificity in experimental measures and participant recruitment. Psych. Sci. (2006) 17(4):300–304CrossrefGoogle Scholar
  • Hau R, Pleskac TJ, Kiefer J, Hertwig R. The description-experience gap in risky choice: The role of sample size and experienced probabilities. J. Behavioral Decision Making (2008) 21(5):493–518CrossrefGoogle Scholar
  • Hertwig R, Erev I. The description–experience gap in risky choice. Trends Cognitive Sci. (2009) 13(12):517–523CrossrefGoogle Scholar
  • Hertwig R, Barron G, Weber EU, Erev I. Decisions from experience and the effect of rare events in risky choice. Psych. Sci. (2004) 15(8):534–539CrossrefGoogle Scholar
  • Hong H, Kubik JD, Stein JC. Thy neighbor's portfolio: Word-of-mouth effects in the holdings and trades of money managers. J. Finance (2005) 60(6):2801–2824CrossrefGoogle Scholar
  • Jacobs H, Müller S, Weber M. How should private investors diversify? An empirical evaluation of alternative asset allocation policies to construct a “world market portfolio”. (2010) . Working paper, University of Mannheim, Mannheim, GermanyGoogle Scholar
  • Jia J, Dyer JS, Butler JC. Measures of perceived risk. Management Sci. (1999) 45(4):519–532LinkGoogle Scholar
  • Kahneman D, Tversky A. Prospect theory: An analysis of decision under risk. Econometrica (1979) 47(2):263–292CrossrefGoogle Scholar
  • Keller CR, Sarin RK, Weber M. Empirical investigation of some properties of the perceived riskiness of gambles. Organ. Behav. Human Decision Processes (1986) 38(1):114–130CrossrefGoogle Scholar
  • Klos A, Weber EU, Weber M. Investment decisions and time horizon: Risk perception and risk behavior in repeated gambles. Management Sci. (2005) 51(12):1777–1790LinkGoogle Scholar
  • Lejarraga T. When experience is better than description: Time delays and complexity. J. Behavioral Decision Making (2010) 23(1):100–116CrossrefGoogle Scholar
  • Markowitz H. Portfolio selection. J. Finance (1952) 7(1):77–91Google Scholar
  • Merton RC. Lifetime portfolio selection under uncertainty: The continuous-time case. Rev. Econom. Statist. (1969) 51(3):247–257CrossrefGoogle Scholar
  • Merton RC. Optimum consumption and portfolio rules in a continuous-time model. J. Econom. Theory (1971) 3(4):373–413CrossrefGoogle Scholar
  • Nosić A, Weber M. How risky do I invest: The role of risk attitudes, risk perceptions and overconfidence. Decision Anal. (2010) 7(3):282–301LinkGoogle Scholar
  • Poterba JM. Stock market wealth and consumption. J. Econom. Perspect. (2000) 14(2):99–118CrossrefGoogle Scholar
  • Rakow T, Newell BR. Degrees of uncertainty: An overview and framework for future research on experience-based choice. J. Behavioral Decision Making (2010) 23:1–14CrossrefGoogle Scholar
  • Samuelson PA. Lifetime portfolio selection by dynamic stochastic programming. Rev. Econom. Statist. (1969) 51(3):239–246CrossrefGoogle Scholar
  • Sarin R, Weber M. Risk-value models. Eur. J. Oper. Res. (1993) 70(2):135–149CrossrefGoogle Scholar
  • Siebenmorgen N, Weber M. The influence of different investment horizons on risk behavior. J. Behavioral Finance (2004) 5(2):75–90CrossrefGoogle Scholar
  • Ungemach C, Chater N, Stewart N. Are probabilities overweighted or underweighted when rare outcomes are experienced (rarely)? Psych. Sci. (2009) 20(4):473–479CrossrefGoogle Scholar
  • van Rooij M, Lusardi A, Alessi R. Financial literacy and stock market participation. J. Financial Econom. (2011) 2:449–472CrossrefGoogle Scholar
  • Weber EU, Milliman R. Perceived risk attitudes: Relating risk perception to risky choice. Management Sci. (1997) 43(2):123–144LinkGoogle Scholar
  • Weber EU, Blais A-R, Betz NE. A domain-specific risk-attitude scale: Measuring risk perceptions and risk behaviors. J. Behavioral Decision Making (2002) 15(4):263–290CrossrefGoogle Scholar
  • Weber EU, Siebenmorgen N, Weber M. Communicating asset risk: How name recognition and the format of historic volatility information affect risk perception and investment decision. Risk Anal. (2005) 25(3):597–609CrossrefGoogle Scholar
  • Weber EU, Shafir S, Blais AR. Predicting risk sensitivity in humans and lower animals: Risk as variance or coefficient of variation. Psych. Rev. (2004) 111(2):430–445CrossrefGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.