Is there a pessimistic bias in individual beliefs ? Evidence from survey dat

Selima Benmansour, Elyès Jouini () and Clotilde Napp
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Selima Benmansour: DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

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Abstract: The aim of this paper is to determine whether individuals exhibit a behavioral bias towards pessimism in their beliefs, in a lottery or more generally in an investment opportunities framework. For this purpose, we design a field survey ona sample of 1,540 individuals aiming at deriving a measure of pessimism from answers to hypothetical scenarios. In the context of our experiment, we observe that individuals are on average pessimistic. We analyze how pessimism is distributed among individuals, in particular in link with gender, age and income. We also analyze how our notion of pessimism is related to more general notions of pessimismalready introduced in psychology. We finally estimate the possible impact of this pessimistic bias on the financial markets equilibrium risk premium

Keywords: pessimism; judged probability; lottery (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (20)

Published in European Financial Management Symposium, 2006, Durham, United Kingdom

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00163694

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