EconPapers    
Economics at your fingertips  
 

Time Delay and Investment Decisions: Evidence from An Experiment in Tanzania

Plamen Nikolov

Economics Bulletin, 2018, vol. 38, issue 2, 1124-1137

Abstract: Attitudes toward risk underlie virtually every important economic decision an individual makes. In this experimental study, I examine how introducing a time delay into the execution of an investment plan influences individuals' risk preferences. The field experiment proceeded in three stages: a decision stage, an execution stage and a payout stage. At the outset, in the Decision Stage (Stage 1), each subject was asked to make an investment plan by splitting a monetary investment amount between a risky asset and a safe asset. Subjects were informed that the investment plans they made in the Decision Stage are binding and will be executed during the Execution Stage (Stage 2). The Payout Stage (Stage 3) was the payout date. The timing of the Decision Stage and Payout Stage was the same for each subject, but the timing of the Execution Stage varied experimentally. I find that individuals who were assigned to execute their investment plans later (i.e., for whom there was a greater delay prior to the Execution Stage) invested a greater amount in the risky asset during the Decision Stage.

Keywords: risk and time; investments; reference-point models; field experiment (search for similar items in EconPapers)
JEL-codes: D8 D9 (search for similar items in EconPapers)
Date: 2018-06-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10) Track citations by RSS feed

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2018/Volume38/EB-18-V38-I2-P109.pdf (application/pdf)

Related works:
Working Paper: Time Delay and Investment Decisions: Evidence from an Experiment in Tanzania (2020) Downloads
Working Paper: Time Delay and Investment Decisions: Evidence from an Experiment in Tanzania (2019) Downloads
Working Paper: Time Delay and Investment Decisions: Evidence from An Experiment in Tanzania (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-17-00225

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().

 
Page updated 2021-01-16
Handle: RePEc:ebl:ecbull:eb-17-00225