The standard portfolio choice problem in Germany

Steffen Huck, Tobias Schmidt and Georg Weizsäcker

Discussion Papers, Research Unit: Economics of Change from WZB Berlin Social Science Center

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 analogous laboratory experiments suggest that task complexity decreases the responsiveness to incentives. Modifying the return of the (simpler) safe asset has a larger effect.

Keywords: stock market expectations; stock market participation; portfolio choice; artefactual field experiment; financial literacy (search for similar items in EconPapers)
JEL-codes: D1 D14 D84 G11 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: The Standard Portfolio Choice Problem in Germany (2021)
Journal Article: The Standard Portfolio Choice Problem in Germany (2021)
Working Paper: The Standard Portfolio Choice Problem in Germany (2019)
Working Paper: The Standard Portfolio Choice Problem in Germany (2015)
Working Paper: The Standard Portfolio Choice Problem in Germany (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wzbeoc:spii2014308

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