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Stereotypes and Risk Attitudes: Evidence from the Lab and the Field

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Listed:
  • Andrea Leuermann
  • Benjamin Roth

Abstract

Recent studies have found correlations between risk attitudes and several sociodemographic characteristics. In this paper, we deploy an artefactual field experiment and study whether subjects - non-professionals and -financial professionals - are aware of these correlations. This is largely confirmed by our results for all subject groups. We show that the subjects attach informational value to sociodemographic information when assessing others' risk attitudes. This provides external validity to the correlations found between risk preferences and sociodemographics. A person's self-assessment of risk attitudes is the most helpful device for the subjects' assessments of others, although experienced professionals make use of it to a minor extent than all other subjects.

Suggested Citation

  • Andrea Leuermann & Benjamin Roth, 2012. "Stereotypes and Risk Attitudes: Evidence from the Lab and the Field," SOEPpapers on Multidisciplinary Panel Data Research 474, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp474
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.407877.de/diw_sp0474.pdf
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    References listed on IDEAS

    as
    1. Belzil, Christian & Leonardi, Marco, 2007. "Can risk aversion explain schooling attainments? Evidence from Italy," Labour Economics, Elsevier, vol. 14(6), pages 957-970, December.
    2. Jonathan E. Alevy & Michael S. Haigh & John A. List, 2007. "Information Cascades: Evidence from a Field Experiment with Financial Market Professionals," Journal of Finance, American Finance Association, vol. 62(1), pages 151-180, February.
    3. Gary Charness & Marie-Claire Villeval, 2009. "Cooperation and Competition in Intergenerational Experiments in the Field and the Laboratory," American Economic Review, American Economic Association, vol. 99(3), pages 956-978, June.
    4. Robert B. Barsky & F. Thomas Juster & Miles S. Kimball & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 537-579.
    5. Jonathan E. Alevy & Michael S. Haigh & John List, 2006. "Information Cascades: Evidence from An Experiment with Financial Market Professionals," NBER Working Papers 12767, National Bureau of Economic Research, Inc.
    6. Steffen Andersen & Glenn Harrison & Morten Lau & E. Rutström, 2009. "Elicitation using multiple price list formats," Experimental Economics, Springer;Economic Science Association, vol. 12(3), pages 365-366, September.
    7. Marie Claire Villeval, 2007. "Experiments in Economics," Post-Print halshs-00257875, HAL.
    8. Franklin Allen, 2001. "Do Financial Institutions Matter?," Journal of Finance, American Finance Association, vol. 56(4), pages 1165-1175, August.
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    Cited by:

    1. Roth, Benjamin & Voskort, Andrea, 2014. "Stereotypes and false consensus: How financial professionals predict risk preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PB), pages 553-565.

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    More about this item

    Keywords

    Risk preferences; financial advice; artefactual field experiment; behavioral finance;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G2 - Financial Economics - - Financial Institutions and Services

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