Andersen, Steffen, Hanspal, Tobin, Nielsen, Kasper Meisner. 2019. Once bitten, twice shy: The power of personal experiences in risk taking. Journal of Financial Economics. 132 (3), 97-117.
BibTeX
Abstract
We study whether personal experiences are so powerful that they make individuals actively shy away from risk. Our research design relies on portfolio decisions relating to inheritances, which alter the active decision from one of choosing to take risk to one of choosing to reduce risk. Experience derives from investments in banks that defaulted following the 2007–2009 financial crisis. We classify experiences into first-hand experiences, resulting from personal losses; second-hand experiences, from losses of family members; and third-hand experiences, from locations where banks defaulted. Our results demonstrate that experiences gained personally, not common shocks, make individuals shy away from risk.
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Status of publication | Published |
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Affiliation | External |
Type of publication | Journal article |
Journal | Journal of Financial Economics |
Citation Index | SSCI |
WU Journalrating 2009 | A+ |
Starjournal | Y |
Language | English |
Title | Once bitten, twice shy: The power of personal experiences in risk taking |
Volume | 132 |
Number | 3 |
Year | 2019 |
Page from | 97 |
Page to | 117 |
Reviewed? | Y |
URL | https://www.sciencedirect.com/science/article/pii/S0304405X18303088 |
DOI | http://dx.doi.org/10.1016/j.jfineco.2018.10.018 |
Open Access | N |
Associations
- People
- Hanspal, Tobin (Details)
- External
- Andersen, Steffen (Copenhagen Business School, Denmark)
- Nielsen, Kasper Meisner (Copenhagen Business School, Denmark)
- Organization
- Institute for Finance, Banking and Insurance IN (Details)