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Portfolio choice in the presence of nontradeable income: an experimental analysis

Alexander Klos and Martin Weber

No 04-01, Papers from Sonderforschungsbreich 504

Abstract: This paper reports the results of experiments on portfolio choice in the presence of nontradeable income. The nontradeable income part could either be riskless or risky (background risk). In many cases, we observe behavior which is qualitatively consistent with the predictions of normative theory. However, correlations between financial and nontradeable wealth are neglected. The computation of aggregated risk profiles helps subjects to partly overcome the deviations from normative theory due to neglect of correlations.

Keywords: portfolio choice; experimental economics; nontradeable income; background risk (search for similar items in EconPapers)
JEL-codes: G11 (search for similar items in EconPapers)
Date: 2004
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https://madoc.bib.uni-mannheim.de/2743/1/dp04_01.pdf

Related works:
Journal Article: Portfolio Choice in the Presence of Non‐Tradable Income: An Experimental Analysis (2006) Downloads
Journal Article: Portfolio Choice in the Presence of Non-Tradable Income: An Experimental Analysis (2006) Downloads
Working Paper: Portfolio Choice in the Presence of Nontradeable Income: An Experimental Analysis (2004) Downloads
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