Arbeitspapier
Illusion of Expertise in Portfolio Decisions - An Experimental Approach
Overall, 72 subjects invest their endowment in four risky assets. Each com-bination of assets yields the same expected return and variance of returns. Illusion of expertise prevails when one prefers nevertheless the self-selected portfolio. After being randomly assigned to groups of four subjects are asked to elect their expert based on responses to a prior decision task. Using the random price mecha-nism reveals that 64% of the subjects prefer their own portfolio over the average group portfolio or the expert's port-folio. Illusion of expertise is shown to be stable individually, over alternatives, and for both eliciting methods, willingness to pay and to accept.
- Language
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Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 621
- Classification
-
Wirtschaft
- Subject
-
investment decisions
portfolio selection
overconfidence
unrealistic optimism
illusion of control
endowment effect
- Event
-
Geistige Schöpfung
- (who)
-
Fellner, Gerlinde
Güth, Werner
Maciejovsky, Boris
- Event
-
Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2001
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
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
- Fellner, Gerlinde
- Güth, Werner
- Maciejovsky, Boris
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2001
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