Non-Standard Preferences and Financial Decision Making

Project Start:01/2014
Status:Completed
Researchers:Paul Gortner
Category: Household Finance, Transparency Lab, Experiment Center
Funded by:LOEWE

In many settings of the financial world, “social preferences” relating to honesty, trustworthiness and feelings of envy and guilt may play an important role. Yet these motivations are barely incorporated into models of financial markets and financial interactions. In this project, the authors investigate both theoretically and experimentally how such preferences influence financial advice, conformity in risk taking and asset market equilibrium, and study how different motivations are shaped and selected by the financial industry.

The first paper “Peer Effects and Risk Sharing in Experimental Asset Markets”, jointly with Paul Gortner, Joel van der Weele and Sascha Baghestanian is currently a SAFE working paper and is under review at a finance journal. The second paper on “Trust, Trustworthiness and Selection into the Financial Industry” (joint work of Andrej Gill, Matthias Heinz and Heiner Schumacher) has been started in May 2013. All experimental sessions are completed. From February to May 2014 we wrote up the working paper and presented it at a number of conferences and workshops. The working paper is currently under revision at an economics journal. The third project “Signaling Cooperation” (joint work of Matthias Heinz and Heiner Schumacher) has been started in May 2015. All experimental sessions are completed. Currently, we set up a field experiment with human resource managers. We expect to have a working paper by the end of September 2015.

 

Related Published Papers

Author/sTitleYearProgram AreaKeywords
Sascha Baghestanian, Paul Gortner, Joël van der WeelePeer Effects and Risk Sharing in Experimental Asset Markets
European Economic Review
2019 Household Finance, Transparency Lab, Experiment Center peer effects, laboratory experiments, risk taking, asset markets
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