Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/238264 
Year of Publication: 
2021
Series/Report no.: 
Working Papers in Economics and Statistics No. 2021-06
Publisher: 
University of Innsbruck, Research Platform Empirical and Experimental Economics (eeecon), Innsbruck
Abstract: 
We investigate how volatility shocks affect investors' risk-taking, risk perception and forecasts. We run artefactual field experiments with two participant pools (finance professionals and students), differing in (i) the direction of the shock (down, up, or a neutral case) and (ii) the presentation format of the time series (prices or returns). ProfessionalsÕ investments are negatively associated with the price change and performance of the stock and their perceived risk increases to a similar extent following shocks of all directions. Students' risk perception, in contrast, is more closely related to the frequency of negative returns rather than an increase in volatility.
Subjects: 
Risk perception
experimental finance
finance professionals
volatility shocks
JEL: 
C91
G11
G41
Document Type: 
Working Paper

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