Are risk-seekers more optimistic? Non-parametric approach

Eyal Weinstock and Doron Sonsino ()

Journal of Economic Behavior & Organization, 2014, vol. 108, issue C, 236-251

Abstract: Class and field surveys revealed that personal inclination to take structured lottery-risk significantly correlates with optimism in financial forecasting. Trait optimism reflects in return predictions for successful and problematic stocks, in likelihood assessments of specific events, and even when respondents recollect past realizations. Gain-domain risk preference shows the strongest predictive power for forecast positivity, even when macro expectations, win-chance optimism and personal attributes are controlled. The correlations are strongest when optimism scores are derived from multiple prediction tasks, but quickly dissolve when subjects receive usable anchors. The findings are discussed in light of optimism scope and recent research on ambiguity aversion.

Keywords: Optimism; Risk-preference; Ambiguity aversion; Anchoring (search for similar items in EconPapers)
JEL-codes: D14 D81 D84 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:108:y:2014:i:c:p:236-251

DOI: 10.1016/j.jebo.2014.10.002

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