Domain-specific risk-taking among finance professionals

Michael Razen, Michael Kirchler and Utz Weitzel

Journal of Behavioral and Experimental Finance, 2020, vol. 27, issue C

Abstract: Risk-assessment and risk-taking in various forms are among the most important tasks financial professionals face in their daily work. A large body of experimental studies has shown a substantial effect of the decision domain (gain vs loss domain) on risk-taking, predominantly among students. In a series of experiments set in different contextual frameworks, we investigate whether this domain effect is also present among experienced employees in the finance industry and compare their decisions with people from the general population. Our results show that employees in the finance industry are equally prone to the domain effect in risk-taking than the general population. Interestingly, for domain-specific risk-taking in a finance context, we find that professionals are even more reluctant to sell loser stocks than non-professionals.

Keywords: Experimental finance; Financial professionals; Domain-specific risk-taking (search for similar items in EconPapers)
JEL-codes: C91 C93 D81 G41 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:27:y:2020:i:c:s2214635020301039

DOI: 10.1016/j.jbef.2020.100331

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