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Determinants of risk taking behavior : the role of risk attitudes, risk perceptions and beliefs

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  • Nosic, Alen
  • Weber, Martin

Abstract

Our study analyzes the determinants of investors' risk taking behavior. We find that investors' risk taking behavior such as portfolio choices can be predicted using risk attitudes, risk perceptions and belief measures such as optimism and overconfidence. However, the predictive power of these determinants heavily depends on the domain in which they were elicited. More specifically, risk attitudes, risk perceptions and beliefs only allow us to predict investors' risk taking behavior if they are elicited in an investment related context. We believe our results could benefit practitioners who could incorporate some of the determinants we have used in their investment advisory process.

Suggested Citation

  • Nosic, Alen & Weber, Martin, 2007. "Determinants of risk taking behavior : the role of risk attitudes, risk perceptions and beliefs," Papers 07-56, Sonderforschungsbreich 504.
  • Handle: RePEc:mnh:spaper:2512
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    File URL: https://ub-madoc.bib.uni-mannheim.de/2512/1/dp07_56.pdf
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    References listed on IDEAS

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    1. repec:eee:jeborg:v:148:y:2018:i:c:p:226-240 is not listed on IDEAS
    2. Coppola, Michela, 2014. "Eliciting risk-preferences in socio-economic surveys: How do different measures perform?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 48(C), pages 1-10.
    3. repec:taf:oabmxx:v:3:y:2016:i:1:p:1232907 is not listed on IDEAS

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