Risk Preferences at the Time of COVID-19: An Experiment with Professional Traders and Students

Marco Cipriani, Marco Angrisani, Antonio Guarino, Ryan Kendall and Julen Ortiz de Zarate Pina

No 15108, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study whether the COVID-19 pandemic has impacted risk preferences, comparing the results of experiments conducted before and during the outbreak. In each experiment, we elicit risk preferences from two sample groups: professional traders and undergraduate students. We find that, on average, risk preferences have remained constant for both pools of participants. Our results suggest that the increases in risk premia observed during the pandemic are not due to changes in risk appetite; rather, they are solely due to a change in beliefs by market participants. The findings of our paper support the traditional view that, at least on average, risk preferences are not affected by economic or social circumstances.

Keywords: Risk aversion; Financial markets professional; Covid-19; Experimental economics (search for similar items in EconPapers)
JEL-codes: D81 D91 N0 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

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