Investment behavior is traditionally investigated with the assumption that it is on average advantageous to invest. However, this may not always be the case. In this paper, we experimentally studied investment choices made by students and financial professionals facing alternately an advantageous and disadvantageous environment in a multi-round investment game. Expected returns from investment in the advantageous environment were higher than a safe alternative, while expected returns were lower in the disadvantageous environment. We investigate how experience and personality are related to choices. Investment behavior does not differ dependent on expected returns and professionals do not significantly differ from students. Personality predicts behavior and in particular we observe that openness to experience was an asset in unfavorable markets, leading to reduced risk taking.
- D14: Household Saving; Personal Finance
- D81: Criteria for Decision-Making under Risk and Uncertainty
Astrid Hopfensitz et Tanja Wranik, « How to Adapt to Changing Markets: Experience and Personality in a Repeated Investment Game », TSE Working Paper, n° 09-122, novembre 2009.
TSE Working Paper, n° 09-122, novembre 2009