Publications in Refereed Journals
Bubbles and Financial Professionals (2019)
(with Weitzel, U., Huber, C., Huber, J., Kirchler, M., Lindner, F.)
Review of Financial Studies
Ready-made oTree apps for time preference elicitation methods (2019)
(with Rose, M.)
Journal of Behavioral and Experimental Finance
Evaluating the replicability of social science experiments in Nature and Science between 2010 and 2015 (2018)
(with Camerer, C., Dreber, A., Holzmeister, F., Ho, T.-H., Huber, J., Johannesson, M., Kirchler, M., Nave, G., Nosek, B., Pfeiffer, T., Altmejd, A., Buttrick, N., Chan, T., Chen, Y., Forsell, E., Gampa, A., Heikenstein, E., Hummer, L., Taisuke, I., Isaksson, S., Manfredi, D., Wagenmakers, E., and Wu, H.)
Nature Human Behaviour
No need for more time: Intertemporal allocation decisions under time pressure (2017)
(with Lindner, F.)
Journal of Economic Psychology
Working Papers
Client-Advisor Matching in the Finance Industry
Job Market Paper
In an experimental study with 567 subjects from the general population and a pool of financial professionals, we introduce a novel matching procedure to assign advisors to clients. This matching is based on two simple measures for risk-return attitudes and the risk bearing capacity. Our findings show that similarity between clients and advisors in those risk measures is not only the desired mechanism by clients, but also significantly increases the delegation probability of investment decisions as well as overall client satisfaction. Additionally, we find that advisors are both willing and able to incorporate clients’ risk attitudes in their investment decisions on the clients’ behalf. A potential drawback of such a matching mechanism is that advisors have incentives to misrepresent their own attitudes if they compete for clients, given that their risk attitudes are significantly different from the general population. The experimental results do not show evidence of this effect in practice, providing support for the stability of the proposed mechanism.
Overview of experimental results for participating financial professionals (in German):
Individual attitudes and market dynamics towards imprecision
(with Christoph Huber)
Submitted
We analyze the impact of individual attitudes on market dynamics in a laboratory experiment with 320 participants under risk and imprecision, where imprecision is modelled in either probabilities, outcome realizations, or a combination of both. In two stages, we first elicit individual reservation prices for risky and imprecise lotteries and then analyze price dynamics in a continuous double auction environment with risky and imprecise fundamentals. Our results underpin the importance of whether imprecision is modelled in probabilities or outcomes on the individual level: On average, we find imprecision-in-outcomes seeking, but neutrality towards imprecision in probabilities, the combination of probabilities and outcomes, and risk. In markets, however, individual attitudes are overridden by market dynamics as past price developments are the main predictor for current realized prices. We find no significant differences between treatments with respect to market variables such as trading volume, volatility, and the dispersion of final asset holdings. Yet, at the market closing, we observe significant overpricing in the risk condition, as well as underpricing in conditions with imprecision in probabilities (supporting ambiguity aversion) and the combination of imprecise probabilities and outcomes, respectively.
Status and Reputation Nudging
(with Michael Kirchler and Stefan Palan)
Under Review
The Impact of Stress on Risky Choice: Preference Shifts or Noise?
(with Elle Parslow)
Submitted
We analyze the impact of acute stress on risky choice in a laboratory experiment with 194 participants. We separate errors in decision-making from an actual shift in preferences between our experimental treatments without the induction of stress and under stress. We find preferences to be stable across conditions on the aggregate and not confounded by increased noise under stress. Exploratory results show that this null effect is driven by the stability of observed choices across conditions by male participants. Female participants instead show an increase in risk aversion under stress. Structural estimations confirm these findings. Additionally, we find statistically significant evidence for lower cognitive abilities being correlated with more noise in decision-making in general, but independent of treatment.
Selected Work in Progress
Large gains, small losses? (Mis)representing returns in financial advice
(with Christoph Huber)
Manuscript in preparation
Price Paths, Stress, and Evaluation Periods
Manuscript in preparation
