Stereotypes and false consensus: How financial professionals predict risk preferences

Benjamin Roth and Andrea Voskort

Journal of Economic Behavior & Organization, 2014, vol. 107, issue PB, 553-565

Abstract: We analyze the prediction of risk preferences of others using an artefactual field experiment with financial professionals and students. For their prediction, the subjects receive information on multiple demographic characteristics and a self-assessment of risk taking of the target. When analyzing the predictions we find three significant effects: subjects use the demographic information for stereotyping as well as the target's self-assessment on risk taking, and we find a considerable false consensus effect. The false consensus effect is the strongest for experienced professionals. Regarding the prediction's accuracy, we find that the forecasts of the professionals are more accurate than the forecasts of the students.

Keywords: Risk preferences; Financial advice; Artefactual field experiment; Behavioral finance (search for similar items in EconPapers)
JEL-codes: C91 D81 G02 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:107:y:2014:i:pb:p:553-565

DOI: 10.1016/j.jebo.2014.05.006

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