Arbeitspapier

Risk taking, preferences, and beliefs: Evidence from Wuhan

We study risk taking in a panel of subjects in Wuhan, China - before, during the COVID-19 crisis, and after the country reopened. Subjects in our sample traveled for semester break in January, generating variation in exposure to the virus and quarantine in Wuhan. Higher exposure leads subjects to reduce planned risk taking, risky investments, and optimism. Our findings help unify existing studies by showing that aggregate shocks affect general preferences for risk and economic expectations, while heterogeneity in experience further affect risk taking through beliefs about individuals' own outcomes such as luck and sense of control.

Language
Englisch

Bibliographic citation
Series: SAFE Working Paper ; No. 301

Classification
Wirtschaft
Portfolio Choice; Investment Decisions
Household Saving; Personal Finance
Behavioral Finance: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets‡
Subject
COVID-19
Risk taking
Beliefs
Formative experiences
Expectations
China

Event
Geistige Schöpfung
(who)
Bu, Di
Hanspal, Tobin
Liao, Yin
Liu, Yong
Event
Veröffentlichung
(who)
Leibniz Institute for Financial Research SAFE
(where)
Frankfurt a. M.
(when)
2021

DOI
doi:10.2139/ssrn.3559870
Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Arbeitspapier

Associated

  • Bu, Di
  • Hanspal, Tobin
  • Liao, Yin
  • Liu, Yong
  • Leibniz Institute for Financial Research SAFE

Time of origin

  • 2021

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