The Impact of Feedback Frequency on Risk Taking: How general is the Phenomenon?
In a recent QJE-article, Gneezy and Potters (1997) present experimental evidence for the impact of feedback frequency on individual risk taking behavior in repeated investment decisions. They find an increased willingness to invest into a risky asset if less frequent feedback about the outcome of previous investments is provided. The observed decision pattern is explained by myopic loss aversion, a combination of mental accounting and loss aversion. In this note, we argue that the findings of Gneezy and Potters on the relationship between feedback frequency and risk taking are not as general as they might seem. We provide theoretical arguments and experimental evidence to demonstrate that the reported phenomenon is not robust to changes in the risk profiles of the given investment options.
|Date of creation:||31 Oct 2000|
|Date of revision:|
|Note:||Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.|
|Contact details of provider:|| Postal: |
Phone: (49) (0) 621-292-2547
Fax: (49) (0) 621-292-5594
Web page: http://www.sfb504.uni-mannheim.de/
More information through EDIRC
Web page: http://www.sfb504.uni-mannheim.de
|Order Information:|| 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.:
- Daniel Kahneman & Dan Lovallo, 1993. "Timid Choices and Bold Forecasts: A Cognitive Perspective on Risk Taking," Management Science, INFORMS, vol. 39(1), pages 17-31, January.
- Benartzi, Shlomo & Thaler, Richard H, 1995.
"Myopic Loss Aversion and the Equity Premium Puzzle,"
The Quarterly Journal of Economics,
MIT Press, vol. 110(1), pages 73-92, February.
- Shlomo Benartzi & Richard H. Thaler, 1993. "Myopic Loss Aversion and the Equity Premium Puzzle," NBER Working Papers 4369, National Bureau of Economic Research, Inc.
- Gneezy, U. & Potters, J.J.M., 1997.
"An experiment on risk taking and evaluation periods,"
Other publications TiSEM
da6ba1bf-e15c-41b2-ae95-c, Tilburg University, School of Economics and Management.
- 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.
- Thaler, Richard H, et al, 1997. "The Effect of Myopia and Loss Aversion on Risk Taking: An Experimental Test," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 647-61, May.
- Richard Thaler, 1985.
"Mental Accounting and Consumer Choice,"
INFORMS, vol. 4(3), pages 199-214.
When requesting a correction, please mention this item's handle: RePEc:xrs:sfbmaa:00-49. 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: (Carsten Schmidt)The email address of this maintainer does not seem to be valid anymore. Please ask Carsten Schmidt to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.