Can Information Shape Macroeconomic Disaster Risk Perception and Stimulate Investment? An Experiment with Experts and Laypersons

Brice Corgnet (), Camille Cornand () and Pauline Gandré ()
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Brice Corgnet: EM - EMLyon Business School, GATE - Groupe d'analyse et de théorie économique - UL2 - Université Lumière - Lyon 2 - ENS LSH - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique
Camille Cornand: GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - EM - EMLyon Business School - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique
Pauline Gandré: CNRS, EconomiX, Université Paris Nanterre, 92001 Nanterre

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Abstract: Macroeconomic disasters are low-probability events with severe economic and financial consequences. Using a survey experiment with both finance experts and laypersons, we conduct the first incentivized elicitation of beliefs about macroeconomic disaster risk and subsequent investment in risky financial assets. Our findings indicate that, consistent with the systematic overweighting of recent disasters, both laypersons and finance experts overestimate disaster risk, leading to underinvestment in our portfolio task. However, we find that communicating historical information about the frequency of macroeconomic disasters helps to correct misperceptions of this frequency and stimulate investment. Although participants adjust their beliefs in the expected direction, they fail to react to the precision of information while, in the case of laypersons, reacting to the salience of information. Our findings offer practical guidelines for effective communication by financial institutions and show that they depend on the financial expertise of the target population.

Keywords: Macroeconomic disasters Expectations; Communication; Randomized information experiment C9 (search for similar items in EconPapers)
Date: 2025-06-26
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