Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/62341
Authors: 
Leuermann, Andrea
Roth, Benjamin
Year of Publication: 
2012
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 475
Abstract: 
Advice is important for decision making, especially in the financial sector. We investigate how individuals assess risk preferences of others given sociodemographic information or pictures. Both non-professionals and financial professionals participate in this artefactual field experiment. Subjects mainly rely on the other's self-assessment of risk preferences and on gender when forming the belief about someone else's risk preferences. On average, subjects consider themselves to be more risk-tolerant than the person they evaluate. Subjects use their own risk attitude as a reference point for predicting others' risk preferences. This false consensus effect is less pronounced for young professionals than for senior and non-professionals. Furthermore, financial professionals predict risk preferences more accurately compared to non-professionals.
Subjects: 
risk preferences
financial advice
artefactual field experiment
behavioral finance
JEL: 
C91
D81
G02
Document Type: 
Working Paper

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