Hindsight Bias and Individual Risk Attitude within the Context of Experimental Asset Markets

Boris Maciejovsky (), Tarek El-Sehitya, Hans Haumerb, Christian Helmensteinc and Erich Kirchlerd
Authors registered in the RePEc Author Service: Tarek el Sehity ()

Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group

Abstract: This paper investigates (i) the robustness of hindsight bias in experimental asset markets, (ii) the time invariance of the different experimental risk elicitation methods of certainty equivalents and binary lottery choices, and (iii) their correspondence. The results of our within-subjects approach with 133 traders do not support the conjecture that hindsight bias is a general phenomenon. Furthermore, our findings challenge the presumption of time-stable risk preferences and of procedural invariance with respect to different experimental risk elicitation methods.

Keywords: Hindsight bias; Risk attitude; Financial markets; Experimental economics; Behavioral finance (search for similar items in EconPapers)
JEL-codes: C90 G10 D81 (search for similar items in EconPapers)
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