Year: 2017
Author: Aufenanger, Tobias, Wrede, Matthias
Vierteljahrshefte zur Wirtschaftsforschung, Vol. 86 (2017), Iss. 4 : pp. 51–66
Abstract
On the basis of a laboratory experiment conducted at FAU, we investigated financial decisions under risk and ambiguity. We analyzed the degree of irrationality and the relationship between, on the one hand, financial literacy and mathematical abilities and, on the other hand, financial decisions. It turned out that one-third of subjects acted irrational at least once. Almost no subject was irrationally risk-seeking, whereas a large share of subjects was irrationally risk-averse. The number of irrationally risk-averse subjects was higher in the case of ambiguity, when the probabilities of the uncertain events are unknown, than in the case of risk, when these probabilities are known. Subjects with higher financial literacy and better mathematical skills were less likely to act irrational.
Journal Article Details
Publisher Name: Global Science Press
Language: German
DOI: https://doi.org/10.3790/vjh.86.4.51
Vierteljahrshefte zur Wirtschaftsforschung, Vol. 86 (2017), Iss. 4 : pp. 51–66
Published online: 2017-12
AMS Subject Headings: Duncker & Humblot, Duncker & Humblot
Copyright: COPYRIGHT: © Global Science Press
Pages: 16
Keywords: Financial literacy ambiguity risk insurance demand D14 I21 G11