Beliefs About the Stock Market and Investment Choices: Evidence from a Field Experiment

Publikation: Working paper › Forskning

Standard

Beliefs About the Stock Market and Investment Choices: Evidence from a Field Experiment. / Laudenbach, Christine; Weber, Annika; Wohlfart, Johannes.

2021.

Publikation: Working paper › Forskning

Harvard

Laudenbach, C, Weber, A & Wohlfart, J 2021 'Beliefs About the Stock Market and Investment Choices: Evidence from a Field Experiment'.

APA

Laudenbach, C., Weber, A., & Wohlfart, J. (2021). Beliefs About the Stock Market and Investment Choices: Evidence from a Field Experiment. CEBI Working Paper Series Bind 21 Nr. 17

Vancouver

Laudenbach C, Weber A, Wohlfart J. Beliefs About the Stock Market and Investment Choices: Evidence from a Field Experiment. 2021 nov. 16.

Author

Laudenbach, Christine ; Weber, Annika ; Wohlfart, Johannes. / Beliefs About the Stock Market and Investment Choices: Evidence from a Field Experiment. 2021. (CEBI Working Paper Series; Nr. 17, Bind 21).

Bibtex

@techreport{857b95df9e5c41aaa4861bc3ff199bc9,
title = "Beliefs About the Stock Market and Investment Choices: Evidence from a Field Experiment",
abstract = "We survey retail investors at an online bank to study beliefs about the autocorrelation of aggregate stock returns, and how these beliefs shape investment decisions measured in administrative account data. Individuals{\textquoteright} beliefs exhibit substantialheterogeneity and predict trading responses to market movements. We inform a random half of our respondents that historically the autocorrelation of aggregate returns was close to zero, which persistently changes their beliefs. Among thoseinitially believing in mean reversion, treated respondents buy significantly less equity during the COVID-19 crash four months later. Our results highlight how heterogeneity in subjective models causally drives trade in asset markets.",
keywords = "Faculty of Social Sciences, Expectation Formation, Information, Updating, Retail Investors, Trading",
author = "Christine Laudenbach and Annika Weber and Johannes Wohlfart",
year = "2021",
month = nov,
day = "16",
language = "English",
series = "CEBI Working Paper Series",
number = "17",
type = "WorkingPaper",

}

RIS

TY - UNPB

T1 - Beliefs About the Stock Market and Investment Choices: Evidence from a Field Experiment

AU - Laudenbach, Christine

AU - Weber, Annika

AU - Wohlfart, Johannes

PY - 2021/11/16

Y1 - 2021/11/16

N2 - We survey retail investors at an online bank to study beliefs about the autocorrelation of aggregate stock returns, and how these beliefs shape investment decisions measured in administrative account data. Individuals’ beliefs exhibit substantialheterogeneity and predict trading responses to market movements. We inform a random half of our respondents that historically the autocorrelation of aggregate returns was close to zero, which persistently changes their beliefs. Among thoseinitially believing in mean reversion, treated respondents buy significantly less equity during the COVID-19 crash four months later. Our results highlight how heterogeneity in subjective models causally drives trade in asset markets.

AB - We survey retail investors at an online bank to study beliefs about the autocorrelation of aggregate stock returns, and how these beliefs shape investment decisions measured in administrative account data. Individuals’ beliefs exhibit substantialheterogeneity and predict trading responses to market movements. We inform a random half of our respondents that historically the autocorrelation of aggregate returns was close to zero, which persistently changes their beliefs. Among thoseinitially believing in mean reversion, treated respondents buy significantly less equity during the COVID-19 crash four months later. Our results highlight how heterogeneity in subjective models causally drives trade in asset markets.

KW - Faculty of Social Sciences

KW - Expectation Formation

KW - Information

KW - Updating

KW - Retail Investors

KW - Trading

M3 - Working paper

T3 - CEBI Working Paper Series

BT - Beliefs About the Stock Market and Investment Choices: Evidence from a Field Experiment

ER -

ID: 287823519