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Trust, ambiguity, and financial decision-making

Author

Listed:
  • Jim Engle-Warnick
  • Diego Pulido
  • Marine de Montaignac

Abstract

This paper reports results from an on-line economics experiment with head of household participants that explores the connection between trust and investment behavior. We show that trust is correlated with both the degree to which an investor makes decisions independently and the willingness to invest in an ambiguous asset. Our experiment is the first to suggest a link between trust, ambiguity, and investor independence.

Suggested Citation

  • Jim Engle-Warnick & Diego Pulido & Marine de Montaignac, 2016. "Trust, ambiguity, and financial decision-making," CIRANO Working Papers 2016s-44, CIRANO.
    • Handle: RePEc:cir:cirwor:2016s-44
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    File URL: https://cirano.qc.ca/files/publications/2016s-44.pdf
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    trust; ambiguity; investment decisions; portfolio theory; artefactual field experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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