Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/113774
Authors: 
Huck, Steffen
Schmidt, Tobias
Weizsäcker, Georg
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper 5441
Abstract: 
We study an investment experiment conducted with a representative sample of German households. Respondents invest in a safe asset and a risky asset whose return is tied to the German stock market. Experimental investments correlate with beliefs about stock market returns and exhibit desirable external validity: they predict real-life stock market participation. But many households do not significantly react to an exogenous increase in the risky asset’s return. The data analysis and a series of additional laboratory experiments suggest that task complexity decreases the responsiveness to incentives. Modifying the safe asset’s return has a larger effect than modifying the risky asset’s return.
Subjects: 
stock market expectations
stock market participation
portfolio choice
artefactual field experiment
financial literacy
complexity
JEL: 
D10
D14
D84
G11
Document Type: 
Working Paper

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