Essays on private investors' decision-making and financial advice

  • For private investors it is imperative to a) understand and define their own, individual risk preferences, b) assess their financial and demographic circumstances to determine the individual risk-taking potential, and c) form and maintain a well-diversified risky portfolio. The three chapters of my thesis each match one of these three tasks. \\ \noindent The first chapter of my thesis presents novel experimental evidence to test the existence of a potential projection bias in loss aversion, a significant determinant of investor preferences, thus matching task a). The second chapter is devoted to the determination of private investors' risk-taking potential based on their financial and socio-demographic circumstances, matching task b): In a large portfolio experiment, we examine the ability and heterogeneity of lay and professional advisors in matching investor demographics, such as age and income, with risky asset portfolio shares. The third and final chapter addresses the question on how to reach and maintain an efficient risky portfolio, therefore matching task c): It analyzes a decision support system for private investors that allows its users to simulate any arbitrary set of securities, and by reporting aggregated expected return and risk, to optimize their current portfolio.

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Author:Matthias RumpfGND
Place of publication:Frankfurt am Main
Referee:Andreas HackethalORCiDGND, Thomas OtterGND
Document Type:Doctoral Thesis
Date of Publication (online):2022/04/28
Year of first Publication:2020
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Granting Institution:Johann Wolfgang Goethe-Universität
Date of final exam:2020/07/06
Release Date:2022/04/28
Page Number:244
Last Page:236
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht