The Standard Portfolio Choice Problem in Germany

Artikel

We study an investment experiment 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 at least in one respect: they predict real-life stock market participation. But many households are unresponsive to an exogenous increase in the risky asset’s return. The data analysis and a series of additional laboratory experiments suggest that task complexity decreases the responsiveness to incentives. Modifying the safe asset’s return has a larger effect on behaviour than modifying the risky asset’s return.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: The Economic Journal ; ISSN: 1468-0297 ; Volume: 131 ; Year: 2021 ; Issue: 638 ; Pages: 2413–2446- ; Oxford: Oxford University Press

Classification and Topics

• Classification: Sozialwissenschaften, Soziologie, Anthropologie ; Household Saving; Personal Finance ; Expectations; Speculations ; Portfolio Choice; Investment Decisions
• Subject: stock market expectations ; stock market participation ; portfolio choice ; financial literacy ; complexity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Breunig, Christoph ; Huck, Steffen ; Schmidt, Tobias ; Weizsäcker, Georg
• Event: Veröffentlichung
• (who): Oxford University Press ; ZBW - Leibniz Information Centre for Economics
• (where): Oxford
• (when): 2021

Further information

• DOI: doi:10.1093/ej/ueab006
• Handle: http://hdl.handle.net/10419/235555
• Last update: 10.03.2025, 11:45 AM CET