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The standard portfolio choice problem in Germany

[working paper]

Huck, Steffen; Schmidt, Tobias; Weizsäcker, Georg

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Please use the following Persistent Identifier (PID) to cite this document:http://hdl.handle.net/10419/103211

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Corporate Editor 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 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)
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
Status Published Version; reviewed
Licence Deposit Licence - No Redistribution, No Modifications