When Kahneman meets Manski: Using dual systems of reasoning to interpret subjective expectations of equity returns
To understand how decisions to invest in stocks are taken, economists need to elicit expectations relative to expected risk-return trade-off. One of the few surveys which have included such questions is the Survey of Economic Expectations in 1999-2001. Using this survey, Dominitz and Manski find an important heterogeneity across respondents that can hardly be accounted for by simple models of expectations formation. This paper claims that much of the heterogeneity derives from pathologies affecting respondents. Adapting a principle of dual-reasoning borrowed from Kahneman, we classify respondents according to their sensitivity to these pathologies, and find a strong homogeneity across the less sensitive respondents. We then sketch a model of expectation formation.
(This abstract was borrowed from another version of this item.)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 26 (2011)
Issue (Month): 3 (04)
|Contact details of provider:|| Web page: http://www.interscience.wiley.com/jpages/0883-7252/|
|Order Information:|| Web: http://www3.interscience.wiley.com/jcatalog/subscribe.jsp?issn=0883-7252 Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Christelis, Dimitris & Jappelli, Tullio & Padula, Mario, 2008.
"Cognitive abilities and portfolio choice,"
CFS Working Paper Series
2008/35, Center for Financial Studies (CFS).
- Christelis, Dimitris & Jappelli, Tullio & Padula, Mario, 2006. "Cognitive Abilities and Portfolio Choice," CEPR Discussion Papers 5735, C.E.P.R. Discussion Papers.
- Dimitrios Christelis & Tullio Jappelli & Mario Padula, 2006. "Cognitive Abilities and Portfolio Choice," CSEF Working Papers 157, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
- Dimitris Christelis & Tullio Jappelli & Mario Padula, 2008. "Cognitive Abilities and Portfolio Choice," Working Papers 2008_19, Department of Economics, University of Venice "Ca' Foscari".
- Péter Hudomiet & Gábor Kézdi & Robert J. Willis, 2011. "Stock market crash and expectations of American households," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(3), pages 393-415, 04.
- Hurd, Michael D, 1999.
"Anchoring and Acquiescence Bias in Measuring Assets in Household Surveys,"
Journal of Risk and Uncertainty,
Springer, vol. 19(1-3), pages 111-36, December.
- Michael D. Hurd, 1999. "Anchoring and Acquiescence Bias in Measuring Assets in Households Surveys," Working Papers 99-02, RAND Corporation.
- Hurd, M., 1999. "Anchoring and Acquiescence Bias in Measuring Assets in Households Surveys," Papers 99-02, RAND - Labor and Population Program.
- Flachaire, Emmanuel & Hollard, Guillaume, 2008.
"Individual sensitivity to framing effects,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 67(1), pages 296-307, July.
- Emmanuel Flachaire & Guillaume Hollard, 2008. "Individual sensitivity to framing effects," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00176025, HAL.
- Daniel Kahneman, 2003. "Maps of Bounded Rationality: Psychology for Behavioral Economics," American Economic Review, American Economic Association, vol. 93(5), pages 1449-1475, December.
- Jeff Dominitz & Charles F. Manski, 2007. "Expected Equity Returns and Portfolio Choice: Evidence from the Health and Retirement Study," Journal of the European Economic Association, MIT Press, vol. 5(2-3), pages 369-379, 04-05.
- Dominitz, Jeff, 2001. "Estimation of income expectations models using expectations and realization data," Journal of Econometrics, Elsevier, vol. 102(2), pages 165-195, June.
- repec:use:tkiwps:2323 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:wly:japmet:v:26:y:2011:i:3:p:371-392. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.