We experimentally test overconfidence in investment decisions by offering participants the possibility to substitute … their own for alternative investment choices. Overall, 149 subjects participated in two experiments, one with just one risky …

risk and typically need to assume stability of these characteristics over time and across decision domains. We test the … reliability of two choice tasks for eliciting discount rates, risk aversion, and probability weighting and assess the stability of … largely uncorrelated with decisions in other important life domains involving intertemporal trade-offs and risk. …

The theory of expected utility maximization (EUM) proposed by Bernoulli explains risk aversion as a consequence of … from the terms offered; and subjects often appear to be too risk averse with regard to small gambles (while still accepting … from judgments based on imprecise (and noisy) mental representation of the decision situation. In this model, risk aversion …

We report the results of an experiment on selective exposure to information. A decision maker interested in learning … source even when prior beliefs are strongly unbalanced and this source is less informative. Our experiment suggests that base …

We study reputational herding in financial markets in a laboratory experiment. In the spirit of Dasgupta and Prat (2008 … employers. Employers can observe investment behavior, but not investors' ability types. Thereby, reputational incentives may …

In a laboratory experiment, we measure subjects' willingness to pay for a transparently useless decision right …

risk, showing that the effect of prior experiences depends on task similarity. Beyond that, we extend these findings to …

not captured by existing models. -- investment decision ; delayed resolution of risk ; emotions ; experiment …-based questionnaire before the experiment and participants' preferences for resolution timing, risk, and time were incentive compatibly … measured during the experiment. Main findings are that delayed resolution can affect investment, that the effect depends on the …

In this paper we use an experiment to compare a theory of risk aversion and a theory of spite as an explanation for … overbidding in auctions. As a workhorse we use the second-price all-pay and the first-price winner-pay auction. Both risk and … spite can be used to rationalize deviations from risk neutral equilibrium bids in auctions. We exploit that equilibrium …