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The standard portfolio choice problem in Germany
[working paper]
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Wissenschaftszentrum Berlin für Sozialforschung gGmbH
Abstract We study an investment experiment conducted with a representative sample of German households. Respondents invest in a safe asset and a risky asset whose return is tied to the German stock market. Experimental investments correlate with beliefs about stock market returns and exhibit desirable extern... view more
We study an investment experiment conducted with a representative sample of German households. Respondents invest in a safe asset and a risky asset whose return is tied to the German stock market. Experimental investments correlate with beliefs about stock market returns and exhibit desirable external validity: they predict real-life stock market participation. But many households do not significantly react to an exogenous increase in the risky asset's return. The data analysis and analogous laboratory experiments suggest that task complexity decreases the responsiveness to incentives. Modifying the return of the (simpler) safe asset has a larger effect. (author's abstract)... view less
Keywords
stock market; stock exchange; portfolio management; expectation; financial market; knowledge; investment; private household; artifact
Classification
Financial Planning, Accountancy
Document language
English
Publication Year
2014
City
Berlin
Page/Pages
56 p.
Series
Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Markt und Entscheidung, Abteilung Ökonomik des Wandels, SP II 2014-308
Handle
https://hdl.handle.net/10419/103211
Status
Published Version; reviewed
Licence
Deposit Licence - No Redistribution, No Modifications