An experiment on risk taking and evaluation periods
AbstractDoes the period over which individuals evaluate outcomes influence their investment in risky assets? Results from this study show that the more frequently returns are evaluated, the more risk averse investors will be. The results are in line with the behavioral hypothesis of 'myopic loss aversion,' which assumes that people are myopic in evaluating outcomes over time and are more sensitive to losses than to gains. The results have relevance for the equity premium puzzle and also for the marketing strategies of fund managers. Copyright 1997, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Bibliographic InfoPaper provided by Tilburg University in its series Open Access publications from Tilburg University with number urn:nbn:nl:ui:12-73908.
Date of creation: 1997
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Publication status: Published in Quarterly Journal of Economics (1997) v.112, p.631-646
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Web page: http://www.tilburguniversity.edu/
Other versions of this item:
- Gneezy, Uri & Potters, Jan, 1997. "An Experiment on Risk Taking and Evaluation Periods," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 631-45, May.
- Gneezy, U. & Potters, J.J.M., 1996. "An experiment on risk taking and evaluation periods," Discussion Paper 1996-61, Tilburg University, Center for Economic Research.
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