Illusion of Control as a Source of Poor Diversification: Experimental Evidence
JOURNAL OF BEHAVIORAL FINANCE(2009)
摘要
This paper investigates factors that influence individual portfolio allocations, with particular focus on illusion of control. Participants in the experiment form their portfolios of two risky lotteries and one risk-free alternative with the target to reach a predetermined income. Subjects show illusion of control as they excessively invest in a lottery when they are in charge of the chance move. This finding is amplified when self-selection is possible and mitigated when a well-diversified default portfolio is offered. Presenting sequences of chance moves prior to investment does not affect diversification. In line with excessive extrapolation, the higher the number of observed positive prior outcomes, the more likely is a positive prediction and in turn a higher investment.
更多查看译文
关键词
Investment decisions,Portfolio selection,Egocentric biases,Illusion of control,Excessive extrapolation,Unrealistic optimism,Experimental economics
AI 理解论文
溯源树
样例
生成溯源树,研究论文发展脉络