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Investment Decisions and Risk Preferences among Non-Professional Investors
Stockholm University, Faculty of Social Sciences, School of Business.
2007 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

I analyze a large number of investment decisions based on theories that have been developed and formalized over the past 50 years. Previous work in this field unveils a number of biases which affect ones choices when the outcome is uncertain. In my thesis I find evidence of these already known biases and focus on finding rational explanations for their existence. I also introduce two unexplored biases; the homeboy bias and the menu bias.

The results clearly indicate that sophisticated investors are generally less subject to these biases. Since pension schemes in many nations are shifting towards defined contribution schemes, investment decisions and risk preferences will be of great consequence to investors’ personal economy and ability to consume, affecting the economy in general. It is therefore of great importance that policy makers do all that they can to increase investors sophistication and create a playing field which facilitates economically sound investing.

Place, publisher, year, edition, pages
Stockholm: Företagsekonomiska institutionen , 2007. , 250 p.
Keyword [en]
Portfolio Choice, Pension savings, home bias, individual investors, Style investing, Defined Contribution
National Category
Economics and Business
Research subject
Business Administration
URN: urn:nbn:se:su:diva-6841ISBN: 978-91-7155-426-0OAI: diva2:197178
Public defence
2007-05-24, Philipssalen, hus 3, Kräftriket, Stockholm, 13:00
Available from: 2007-05-04 Created: 2007-05-04Bibliographically approved

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