How to Adapt to Changing Markets: Experience and Personality in a Repeated Investment Game

Astrid Hopfensitz and Tanja Wranik

No 09-122, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: Investment behavior is traditionally investigated with the assumption that it is on average advantageous to invest. However, this may not always be the case. In this paper, we experimentally studied investment choices made by students and financial professionals facing alternately an advantageous and disadvantageous environment in a multi-round investment game. Expected returns from investment in the advantageous environment were higher than a safe alternative, while expected returns were lower in the disadvantageous environment. We investigate how experience and personality are related to choices. Investment behavior does not differ dependent on expected returns and professionals do not significantly differ from students. Personality predicts behavior and in particular we observe that openness to experience was an asset in unfavorable markets, leading to reduced risk taking.

JEL-codes: D14 D81 (search for similar items in EconPapers)
Date: 2009-11
New Economics Papers: this item is included in nep-cbe and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: How to adapt to changing markets: experience and personality in a repeated investment game (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:22245

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