Risk-Relevant Early Life Experiences and Individual Trading Activity

Chee Seng Cheong, Gary Tan and Ralf Zurbruegg

Finance Research Letters, 2021, vol. 39, issue C

Abstract: We examine the impact that risk-relevant childhood experiences have on individuals’ risk preferences when trading. By studying the trading behavior of participants in a simulated asset market, we find that a trader's experience of a major family financial loss during childhood, where their parents derived their salary from, how strict the trader's upbringing was, and birth order all have an impact on the willingness to trade. Overall, our findings contribute to the growing literature which shows that early-life experiences have an impact on adult financial risk preferences.

Keywords: Behavioral and experimental finance; Early-life experiences; Risk preferences; Trading activity (search for similar items in EconPapers)
JEL-codes: G10 G41 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:39:y:2021:i:c:s1544612319312607

DOI: 10.1016/j.frl.2020.101569

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