what explains household stock holdings abstract this is an empirical study of the determinants of stock holdings using data from the us survey of consumer finances from 1992 to 2001 there is a great heterogeneity in the way households form their portfolios stock ownership is positively correlated with various measures of wealth age retirement savings and having sought financial advice it is negatively correlated with holdings of alternative risky investments such as investments in private businesses and with the willingness to undertake non financial investments in the future while we can predict reasonably well who holds stocks we have less predictive power about the share of stocks owned by those who hold positive amounts

pension profile preferences the influence of trust and expected expenses this paper studies the influence of people s expectations about expenses during retirement and trust in pension funds on preferences for different pension arrangements although most workers prefer

the effect of social security contributions on coverage and wages a gender perspective using a natural experiment from colombia author affiliation andres j vargas andres vargas ttu edu acknowledgment i would like to thank steve trejo dan hamermesh gerald oettinger jacqueline angel dan slesnick adriana kugler stefano farne two anonymous referees and seminar participants at the university of texas at austin the second conference on aging in the americas and texas tech university for their insightful and valuable comments i am also grateful to cesar caballero and alejandra corchuelo from the colombian national department of statistics dane for providing me with the data all remaining errors are mine 1 introductiontheoretically social security contributions are considered a benefit linked payroll tax because of the connection between the taxes paid by or on behalf of each worker and that individual s expected benefits hence with the presence of tax benefits linkages workers receive a higher compensation and the contributions are analogous to a price paid for a privately supplied commodity summers 1989 a general payroll tax on the other hand has no linkage to benefits for the individual taxpayer and therefore carries efficiency costs the benefit linkages of social security contributions depend on the extent to which workers perceive that they are getting the contributions back as benefits and on how much the individual values those benefits this depends in turn on the quality of the services offered by the entities financed by the tax if they are perceived as good employees will consider the contributions as a deferred compensation or insurance program and will accept a reduction in the net wage with no employment effects if they are perceived as bad the contributions will be considered as a pure tax with the corresponding effects on employment kesselman 1997 the objective of this article is to investigate from a gender and marital status perspective the effects of pension and health care contributions on the employment and wages of workers covered by social security regulations it is interesting to study colombia because the country implemented a large social security reform in 1993 that allows the identification the labor market effects of these contributions furthermore payments for pension and health care provisions amount to a quarter of the wage bill there this in conjunction with an 11 average contribution for other payroll taxes positions colombia as the country with the highest payroll tax rate in latin america the end of the 1980s and early 1990s was a period of deep structural transformations in latin america these reforms were part of efforts to liberalize economies and increase the participation of the market in the production and allocation of goods and services and were the product of the collapse most economies in the region experienced during the 1980s due to their mounting fiscal and monetary imbalances heckman and pages 2004 these large exogenous shifts in policy regimes offer very good case studies of the interaction between institutions and labor market outcomes the main reforms in colombia during this period included the approval of a new constitution key reforms to the labor market a major trade reform and liberalization in direct foreign investment more than two years after these reforms were put in place colombia implemented a social security reorganization that transformed the institutional framework for pension funds and health care provision law 100 of december 1993 regarding the health care regime the social security reform replaced the existing discretionary affiliation system that covered only the worker with a mandatory one that features a stricter prepayment system and covers also the family of the worker on the subject of pensions the reform introduced a fully funded social security system and gave the workers the choice between this new scheme of individual capitalization of public funds and the existing pay as you go system

risk preferences around the world we present results from a large scale international survey on risk preferences conducted in 53 countries in all countries we find on average an attitude of risk aversion in gains and of risk seeking in losses the degree of risk aversion shows significant cross country differences moreover risk attitudes in our sample depend not only on economic conditions but also on cultural factors as measured by the hofstede dimensions individualism and uncertainty avoidance the data may also serve as an interesting starting point for further research on cultural differences in behavioral economics data as supplemental material are available at http dx doi org 10 1287 mnsc 2013 1869 this paper was accepted by peter wakker decision analysis

gender differences in the allocation of assets in retirement savings plans in 1995 40 percent of working men and 32 percent of working women were covered by a defined contribution dc plan a distinguishing characteristic of these plans is that workers can generally choose how their assets are invested using data from the 1992 and 1995 surveys of consumer finances scf this paper examines whether workers differ systematically by gender in the allocation of assets in dc plans previous researchers have reported that many workers tend to invest their retirement assets too conservatively and in particular that women are less likely than men to invest in risky assets such as stocks in the presence of an equity premium a lower propensity by women to invest in stocks could translate into large differences in the accumulation of financial wealth for retirement we establish that gender differences in investment decisions exist though they are more complicated than previous studies have suggested we show that these differences are not completely explained by differences in individual or household characteristics a few studies have examined gender differences in investment decisions vickie l bajtelsmit and jack l vanderhei 1997 richard p hinz et al 1997 these studies use administrative data and report that women tend to invest their retirement funds in less risky vehicles than men michael haliassos and carol c bertaut 1995 use the 1983 scf to examine why such a large fraction of households do not own any stock they report that gender does not have a significant effect on the probability of owning stock though gender differences are not the focus of their paper what these data sources lack haliassos and bertaut being the exception is a rich set of demographic and other variables on households that theory predicts should affect investment behavior this paper adds to the literature by examining gender differences in investment decisions conditioning on such variables the results highlight the importance of including marital status risk aversion measures and the portfolio of assets held outside dc plans when examining gender differences in investment decisions in these plans

a transactions data analysis of nonsynchronous trading weekly returns of stock portfolios exhibit substantial autocorrelation analytical studies suggest that nonsynchronous trading is capable of explaining from 5 to 65 of the autocorrelation the varying importance of nonsynchronous trading in these studies arises primarily from differing assumptions regarding nontrading periods of stocks we simulate the effects of nonsynchronous trading by sampling stock returns from a return generating process using transactions data to obtain the precise time of each stock s last trade we find that simulated weekly portfolio returns exhibit autocorrelations that are roughly 25 that of their observed crsp weekly returns article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

cognitive constraints on valuing annuities this paper documents consumers difficulty valuing life annuities using a purpose built experiment in the american life panel we show that the prices at which people are willing to buy annuities are substantially below the prices at which they are willing to sell them we also find that buy values are negatively correlated with sell values and that the sell buy valuation spread is negatively correlated with cognition this spread is larger for those with less education weaker numerical abilities and lower levels of financial literacy our evidence contributes to the emerging literature on heterogeneity in financial decision making abilities particularly regarding retirement payouts jel d14 d91 g11 h55

financial literacy and participation in the derivatives markets we set out in this study to determine whether individuals with higher levels of financial literacy are more likely to be active participants in the derivatives markets our empirical results based upon an official national survey undertaken by the financial supervisory commission of taiwan reveal that even after controlling for stock market participation rates financial literacy represents a significant benefit to individuals since it helps them to lower the entry barriers to purchasing complex derivatives products we also find that household wealth gender residential location and diverse sources of information have significant effects on participation rates in the derivatives markets furthermore when taking into consideration issues of accessibility or measurement error the positive effects of financial literacy on derivatives market participation are found to remain largely unchanged

are women more risk averse we find that single women exhibit relatively more risk aversion in financial decision making than single men using u s sample data we examine household holdings of risky assets to determine whether there are gender differences in financial risk taking as wealth increases the proportion of wealth held as risky assets is estimated to increase by a smaller amount for single women than for single men gender differences in financial risk taking are also influenced by age race and number of children greater financial risk aversion may provide an explanation for women s lower levels of wealth compared with men s jel j16 d81 g11

behavioral impediments to valuing annuities complexity and choice bracketing this paper examines two behavioral factors that diminish people s ability to value a lifetime income stream or annuity drawing on a randomized experiment with about 4 000 adults in a u s national

gender differences in time preferences this paper reports the results from a large online experiment in which we examine gender differences in time preferences subjects choose in different situations between receiving an immediate payment and receiving a different sum later we find that more men than women are impatient and choose to receive the immediate payment at least if the implicit interest rate of the late option is neither too high nor too low

political economy of pension plans impact of institutions gender and culture abstract national pension systems are an important part of financial intermediation and worker welfare in most countries but how and why do they differ internationally controlling for important political economic and social institutions we document that international differences in pension progressivity or how pensions reflect lifetime earnings are negatively related to masculinity uncertainty avoidance individualism long term orientation employment rights average pension levels social trust and economic inequality we also find that pension progressivity is positively related to the economic and societal role of women the extent of catholicism as well as political voice and accountability these results provide important insights for both public policy and mnc managers

an investigation of time preferences life expectancy and annuity versus lump sum choices can smoking harm long term saving decisions abstract we exploit the fact that israeli pension insurance policies do not take health conditions or smoking status into account in annuity pricing to investigate the potential effect of being a smoker on retirement payout choices contrary to the idea that smokers have higher discount rates and thus should prefer the lump sum option and even though the insurance pricing mechanism means that smokers would be offered the same annuity as nonsmokers all else equal we find that smokers do not prefer the lump sum option we offer and test several potential explanations for our findings illusions regarding life expectancy self control and advantageous selection

an experimental test of the under annuitization puzzle with smooth ambiguity and charitable giving abstract in a life cycle model with a bequest motive we study the impact of smooth ambiguity aversion to uncertain survival probabilities on the optimal demand for annuities we implement a theory driven laboratory experiment first a subject s ambiguity attitude is elicited in a simple experimental setting able to make the smooth ambiguity model operational then in a two period annuity bequest decision problem the subject s bequest in the second period is presented as a donation to a previously chosen charity contingent to the subject being active after the first period in line with the theoretical predictions we find that ambiguity averse resp loving subjects invest less resp more in annuities than ambiguity neutral ones furthermore subjects contingent donation to the chosen charity increases in their investment in annuities only for sufficiently high levels of warm glow altruism

is competition the answer abstract proposals for more price competition in medical services delivery have arisen on both sides of the atlantic perhaps the most visible pro competition spokesman in the united states is alain enthoven 1978 1980 but other names are also prominently associated with the concept mcclure 1978 havighurst 1980 president s commission 1980 greenberg 1981 recently legislation to promote competition has been introduced in the united states congress periodically individuals in other parts of the world also unfurl the banner of competition lees 1961 stahl in press the remarks that follow are limited to the american context for brevity some of them would have to be altered in other institutional contexts

efficient tax reporting the effects of taxpayer liability information services the complexity of the individual income tax system can give rise to both under and overreporting of liability thus creating a wedge between taxpayer perceptions of the price of public services and their actual cost and potentially leading to budget misallocations and associated efficiency losses this study uses theory and experiments to evaluate the effectiveness of taxpayer service programs that endeavor to resolve uncertainty over tax liability to do so we induce uncertainty over tax liability and investigate the effects of both service accuracy and reliability we find participants are less likely to file when tax liability is uncertain but the provision of information offsets this effect furthermore it appears that simply providing a service even one that imperfectly reveals liability increases the propensity to file and the accuracy of the filing when a service that promises to resolve uncertainty completely is requested but not delivered the result is underreporting even more severe than in a setting where no service is available jel h2 h26 c91

gender differences in portfolio risk across birth cohort and marital status this paper investigates gender differences in portfolio risk among canadian men and women and finds that controlling for a variety of personal and household characteristics never married men born post 1966 hold significantly higher risk portfolios relative to single women and married couples conversely observed gender differences among pre 1943 birth cohorts are primarily driven by disparities in characteristics rather than gender or marital status previously married women born 1955 1966 have remarkably high predicted portfolio risk relative to other women and men in the same cohort

mortgage choice as a natural field experiment on choice under risk data on approximately 280 000 borrowers from the uk survey of mortgage lenders are used to model choices between variable and fixed rate mortgages the choice is assumed to depend on three factors risk attitude interest rate expectations and individual discount rate the ordered probit model is used for estimation while taking account of a number of econometric issues including missing counterfactuals selectivity and endogeneity a large number of strong effects are found including higher income borrowers are less risk averse and have a lower discount rate and risk aversion rises with the amount borrowed providing evidence of increasing relative risk aversion

will women lead the way differences in demand for corporate social responsibility information for investment decisions recent years have featured a leap in academic and public interest in corporate social responsibility csr activities and related corporate reporting two main themes in this literature are the exploration of management incentives to engage in and disclose this information and of the use and value of this information to market participants we extend the second theme by examining the interest that specific investor classes have in the use of csr information we rely on feminist intersectionality which suggests that gender intersects with other identities to yield different values experiences and opportunities that can lead to gender based preferences for csr information based upon a survey of 750 us based retail investors we find that female retail investors have a greater interest in the use of csr information relative to male retail investors women express greater anticipated future demand for this information than do men further the magnitude of the increase from current use to anticipated future demand is greater for women than men age is a significant modifying factor in that the discrepancy between women of any age and older men is greater than that between women and younger men finally women also exhibit greater demand for streamlining of the information flow consistent with pressures induced by time poverty it appears that current disclosure practices provide a less than optimal match with the needs of the information consumers that are primarily interested in using this information this mismatch may result in a systematic disenfranchisement of female investing classes which suggests an ethical need to level the playing field

naive diversification strategies in defined contribution saving plans there is a worldwide trend toward defined contribution saving plans and growing interest in privatized social security plans in both environments individuals are given some responsibility to make their own asset allocation decisions raising concerns about how well they do at this task this paper investigates one aspect of the task namely diversification it is shown that some investors follow the 1 n strategy they divide their contributions evenly across the funds offered in the plan consistent with this naive notion of diversification it is found that the proportion invested in stocks depends strongly on the proportion of stock funds in the plan

portfolio choice and trading in a large 401 k plan we study nearly 7 000 retirement accounts during the april 1994 august 1998 period several interesting patterns emerge most asset allocations are extreme either 100 percent or zero percent in equities and there is inertia in asset allocations equity allocations are higher for males married investors and for investors with higher earnings and more seniority on the job equity allocations are lower for older investors there is very limited portfolio reshuffling in sharp contrast to discount brokerage accounts daily changes in equity allocations correlate only weakly with same day equity returns and do not correlate with future equity returns

gender stock market participation and financial literacy abstract women participate less than men in the stock market and score lower on financial literacy we explore the link between this gender gap in stock market participation and financial literacy using survey data on a random sample of 1300 individuals that is representative of the swedish population we show that the estimated gender gap in stock market participation diminishes when we control for basic financial literacy essentially a measure of numeracy a gender gap in risk taking remains significant also when controlling for financial literacy

birgit grodal a friend to her friends it was much too soon we knew it could happen she participated in the proceedings of the conference in her honor held in copenhagen in september 2002 with a display of her usual acumen and vigor but we left worried i do not know if the time ever comes for anyone but it had not come for her it is hard to accept with the passing of birgit grodal the european economic association loses its 2005 president the community of european economists one of its shapers and leading figures the worldwide community of economic theorists and mathematical economists an outstanding general equilibrium theorist and her many friends a friend

tiers in one sided matching markets theory and experimental investigation the design of a matching market may affect behavior in prematch stages in some settings forward looking agents might purchase low priced properties with the intention of trading up from a design standpoint such behavior is undesirable we investigate a tiered structure as a potential solution using a model that endogenizes prematch acquisition decisions we show that tiers promote exchange while protecting the primary market in the laboratory we find that both firm revenue and total social surplus are improved by tiered matching and the amount of improvement depends on the exchange mechanism the firm uses we focus on two popular mechanisms deposit first and request first we find that subjects are less likely to take advantage of the match under tier free deposit first mechanism possibly because of risk aversion thus a tiered approach is more critical under the request first mechanism we confirm that risk aversion partly explains deviations from theory this paper was accepted by uri gneezy

what makes annuitization more appealing we conduct and analyze two large surveys of hypothetical annuitization choices we find that allowing individuals to annuitize a fraction of their wealth increases annuitization relative to a situation where annuitization is an all or nothing decision very few respondents choose declining real payout streams over flat or increasing real payout streams of equivalent expected present value highlighting the effects of inflation increases demand for cost of living adjustments frames that highlight flexibility control and investment significantly reduce annuitization a majority of respondents prefer to receive an extra bonus payment during one month of the year that is funded by slightly lower payments in the remaining months concerns about later life income spending flexibility and counterparty risk are the most important self reported motives that influence the annuitization decision

who chooses annuities an experimental investigation of the role of gender framing and defaults research suggests that women are more risk averse and less financially literate than men as evidenced by their choice of less risky asset investments we contribute to the literature by focusing on the role of gender in an increasingly important financial decision facing individuals at retirement the choice between purchasing an annuity in this case a fixed immediate lifetime annuity or investing their savings on their own by using a controlled experiment we eliminate the role of adverse selection and unfair annu ity pricing and are able to focus specifically on gender we also explore the role of defaults and framing and whether women react differently to these features we find that women are more likely to choose the annuity and this is only partly explained by differences in risk aversion and financial literacy furthermore biases in a five minute presentation of information signifi cantly affect choices in ways that differ across men and women

are women more predictable than men during the ncaa basketball tournaments from 2002 to 2005 men s games produced 27 more upsets than women s games to test whether these unpredictable results were due to gender differences we conduct logit analysis to explain upsets by gender and other potentially significant variables including differences in competing teams i rpi scores ii percentage of freshmen iii percentage of seniors iv top scorer s total points and v top three scorers total points these analyses suggest that gender plays a significant role in explaining predictability

gender differences in examination behavior a unique examination strategy in first year microeconomics courses is used to test for gender differences in examination behavior students have the possibility of attaining a seminar bonus on the final exam for near perfect seminar attendance and are given two voluntary initial quizzes during the semester at the final exam the scores received on initial quizzes can either be accepted as is or students can attempt to improve their marks by answering similar quiz questions on the exam results suggest that female students are more likely to take initial quizzes and receive a seminar bonus but are less likely to re take quiz questions on the final exam these results suggest higher risk aversion less overconfidence and more self discipline or less procrastination among female students relative to male students our estimated behavioral differences may have important implications in terms of final grades on the course jel i21 j16 a12 a14

the gender effect in risky asset holdings abstract we study the relation between gender and stock holdings in finland a particularly gender equal country we show that it is crucial to control for risk aversion using a measure of subjective risk taking rather than measures derived from abstract gambles controls related to financial knowledge and resources also explain the gender difference the residual effect of the male gender on the conditional equity share after all appropriate controls is 3 percentage points and statistically significant the effect on stock market participation on the other hand is close to zero or negative so men contribute more to the nonparticipation puzzle conditional on covariates the gender difference mainly works through women s higher risk aversion which we find extends to finance professionals and wealthy private banking customers

financial literacy financial education and downstream financial behaviors policy makers have embraced financial education as a necessary antidote to the increasing complexity of consumers financial decisions over the last generation we conduct a meta analysis of the relationship of financial literacy and of financial education to financial behaviors in 168 papers covering 201 prior studies we find that interventions to improve financial literacy explain only 0 1 of the variance in financial behaviors studied with weaker effects in low income samples like other education financial education decays over time even large interventions with many hours of instruction have negligible effects on behavior 20 months or more from the time of intervention correlational studies that measure financial literacy find stronger associations with financial behaviors we conduct three empirical studies and we find that the partial effects of financial literacy diminish dramatically when one controls for psychological traits that have been omitted in prior research or when one uses an instrument for financial literacy to control for omitted variables financial education as studied to date has serious limitations that have been masked by the apparently larger effects in correlational studies we envisage a reduced role for financial education that is not elaborated or acted upon soon afterward we suggest a real but narrower role for just in time financial education tied to specific behaviors it intends to help we conclude with a discussion of the characteristics of behaviors that might affect the policy maker s mix of financial education choice architecture and regulation as tools to help consumer financial behavior this paper was accepted by uri gneezy behavioral economics

the weak axiom of revealed preference in a productive economy we consider an economy with pure factors of production private ownership of endowments and constant returns to scale in production typically in such an economy the weak axiom of revealed preference for market demand does not hold the main reason for this is that the income distribution in such a private ownership economy depends too sensitively on the price system

the annuity puzzle remains a puzzle abstract we examine incomplete annuity menus background risk bequest motives and default risk as possible drivers of divergence from full annuitization contrary to what is often suggested in the literature we find that full annuitization remains optimal if saving is possible after retirement this holds irrespective of whether real or only nominal annuities are available whenever liquidity is desired individuals save sizeable amounts out of their annuity income to smooth consumption shocks similarly adding equity linked annuities to the menu does not increase welfare significantly since individuals can invest in stocks in order to get the desired equity exposure

personal investing advice theory and evidence data from a unique survey containing information on the composition of the respondents total asset holdings both inside and outside their retirement accounts shed light on individual asset allocation behavior individual asset allocations are consistent with the recommendations of expert practitioners and with the prescriptions of economic theory the survey respondents maintain in cash and near cash investments a proportion of their wealth that declines as wealth increases they hold these safe assets outside their retirement accounts the proportion of total assets that they hold in equities declines with age and rises with wealth they do not appear to manage their assets across retirement and nonretirement accounts to maximize tax efficiency

gender differences in revealed risk taking evidence from mutual fund investors abstract using data from a national survey of nearly 2000 mutual fund investors we investigate whether investor gender is related to risk taking as revealed in mutual fund investment decisions consonant with the received literature we find that women exhibit less risk taking than men in their most recent largest and riskiest mutual fund investment decisions more importantly we find that the impact of gender on risk taking is significantly weakened when investor knowledge of financial markets and investments is controlled in the regression equation this result suggests that the greater level of risk aversion among women that is frequently documented in the literature can be substantially but not completely explained by knowledge disparities

the impact of choice architecture on sustainable consumer behavior the role of guilt companies often encourage consumers to engage in sustainable behaviors using their services in a more environmentally friendly or green way such as reusing the towels in a hotel or replacing paper bank statements by electronic statements sometimes the option of green service is implied as the default and consumers can opt out while in other cases consumers need to explicitly ask opt in for switching to a green service this research examines the effectiveness of choice architecture and particularly the different default policies i e the alternative the consumer receives if he she does not explicitly request otherwise in engaging consumer green behavior in four experiments we show that the opt out default policy is more effective than the opt in because it increases anticipated guilt this effect is stronger for consumers who are less conscious for the environment study 1 we also show that a forced choice policy in which the consumer is not automatically assigned to any condition and is forced to choose between the green and the non green service option is more effective than the opt in policy and not significantly more effective than the opt out policy study 2 finally we show that the role of defaults is weakened enhanced if a negotiated reciprocal cooperation strategy is used study 3 the article contributes to the literature of defaults and provides managerial and public policy implications for the design of green services

gender differences in risk aversion and expected retirement benefits women are generally considered more risk averse than men controlling for age income and education this study examined the impact of gender on the superannuation retirement fund risk preferences of staff in the australian university sector the findings suggest that women choose more conservative investment strategies than men and that lower income which affects the amount members contribute to their superannuation funds is the primary contributor to the lower projected retirement benefits of women providing members with a choice among risk levels in their retirement investments should significantly benefit male and female retirees

offering versus choice in 401 k plans equity exposure and number of funds records of over half a million participants in more than 600 401 k plans indicate that participants tend to allocate their contributions evenly across the funds they use with the tendency weakening with the number of funds used the number of funds used typically between three and four is not sensitive to the number of funds offered by the plans which ranges from 4 to 59 a participant s propensity to allocate contributions to equity funds is not very sensitive to the fraction of equity funds among offered funds the paper also comments on limitations on inferences from experiments and aggregate level data analysis how much and how to save for retirement is one of the most important financial decisions made by most people defined contribution dc pension plans such as the popular 401 k plans are important instruments of such savings by 2001 year end about 45 million american employees held 401 k plan accounts with a total of 1 75 trillion in assets holden and vanderhei 2001 an important characteristic of these plans is that the participant has responsibility over his savings among a plan s various funds how responsibly do the participants behave in particular how sensitive are participants choices to possible framing effects associated with the menu of choices they are offered to explore these questions this paper analyzes a data set recently provided by the vanguard group consisting of records of more than half a million participants in about 640 dc plans these plans offer between 4 and 59 funds in which participants can invest all plans offer at least one stock fund 635 plans

clubs and the market this paper defines a general equilibrium model with exchange and club formation agents trade multiple private goods widely in the market can belong to several clubs and care about the characteristics of the other members of their clubs the space of agents is a continuum but clubs are finite it is shown that i competitive equilibria exist and ii the core coincides with the set of equilibrium states the central subtlety is in modeling club memberships and expressing the notion that membership choices are consistent across the population

the threat of cream skimming in the post reform nhs the allocation of budgets to general practitioners to enable them to purchase selected hospital services has been one of the most imaginative elements of the recent national health service reforms in britain however reliance on historic costs budgeting has weakened the efficiency incentives of fund holding while perpetuating the large variations in resource use endemic in general practice on the other hand policy changes aimed to introduce elements of capitation funding although welcome raise the spectre of cream skimming the paper explores the potential for protection against cream skimming offered by incorporating chronic health factors into the formula

is financial instability male driven gender and cognitive skills in experimental asset markets abstract the hypothesis that price stability would reliably increase with the fraction of women operating in financial markets has been frequently suggested in policy discussions to test this hypothesis we conducted 10 male only 10 female only and 10 mixed gender experimental asset markets and compared the effects of gender composition confidence risk attitude and cognitive skills male and female markets have comparable volatility and deviations from fundamentals whereas mixed gender markets are substantially more stable on the other hand higher average cognitive skills of the group are associated with reduced market volatility individual level analysis shows that subjects with higher cognitive skills trade at prices closer to fundamental values and earn significantly higher profits similarly mixed markets exhibit lower mispricing particularly for traders with lower cognitive skills our results are demonstrated to hold in other experimental asset market studies suggesting that a mixed gender composition reduces mispricing across different types of asset markets

how does gender really affect investment behavior abstract in this paper we study gender differences in investment behavior by making use of a dedicated proprietary dataset including 2374 clients of an italian bank we show that after controlling for socio demographic and economic variables gender still explains many differences in the investment decision process risk preferences and portfolio characteristics thus suggesting a role of gender in the investment behavior however no difference is revealed in the portfolio liquidity and diversification meaning that gender does not affect the quality of portfolios

demand for annuities price sensitivity risk perceptions and knowledge abstract the demand for voluntary individual lifetime annuities is low as merely 10 of soon to be retired canadians care to buy such contracts to assess the reasons why we design a stated preference experiment in which we vary characteristics of annuity contracts to estimate individuals sensitivity to an annuity s money s worth that is the value to cost ratio using different measures of longevity risk and survival expectations we investigate how knowledge of annuity products and mortality risk misperceptions affect the take up and the sensitivity of the demand for annuities we find that annuities are objectively actuarially neutral in general meaning that annuity premiums are equal to their expected payment and can appear to offer great value for the money given an individual s subjective mortality risk we also find that demand is somewhat price inelastic so that lowering the price of annuities could increase demand by at most 2 percentage points for a base of 10 lack of knowledge of annuities explains another 0 8 percentage points we find limited additional interest for deferred annuities compared to immediate annuities although respondents are less sensitive to deferred annuity prices

estimation and impact of gender differences in risk tolerance i introduction are women systematically less risk tolerant than men the answer has critical implications for the financial well being of women schubert et al 1999 for example corporations may pass women over for promotion if it is believed that they are unable to make risky financial decisions johnson and powell 1994 financial advisers believing that women are less risk tolerant may recommend conservative portfolios that have lower returns wang 1994 this paper uses a simple model of individual portfolio choice to estimate the distributions of risk tolerance for women and men moments of the model are matched to data on individual retirement accounts iras from the health and retirement study hrs to obtain estimates of the distributions parameters under the assumption of constant relative risk aversion crra utility results show that the mean risk tolerance is 0 25 for women and 0 28 for men economists generally assume that risk aversion the reciprocal of risk tolerance falls in the 0 10 range jagannathan and kocherlakota 1996 the estimates obtained in this paper are consistent with this assumption the impact of the results is gauged in the context of gender differences in wealth accumulation less risk tolerant individuals are more conservative investors conservative investments can lead to low levels of wealth accumulation and may account for the gender gap in wealth lyons et al 2008 data on older americans from the hrs show that men have 103 more wealth in their iras than do women 1 the results from this paper show that gender differences in risk tolerance alone would lead to men accumulating 10 more wealth than women gender differences in risk tolerance can thus account for nearly 10 of the gap in wealth accumulation by comparison gender differences in earnings can account for 51 of the wealth gap the results have implications for recent economic and policy changes that are making individuals increasingly responsible for their own financial security financial security depends greatly on the ability to accumulate adequate retirement wealth wolff 1998 the results suggest that while the difference in risk tolerance does contribute to the gender gap in wealth accumulation the role of the gender gap in earnings remains a primary concern ii literature review gender differences in risk tolerance have been observed in responses to survey questions and risk tolerance instruments the national longitudinal survey of youth 1979 nlsy79 and the hrs both include a series of questions about choosing between two jobs one that pays respondents their current income with certainty and the other that has a 50 50 chance of doubling their income or reducing it by a certain fraction analyzing the hrs question barsky et al 1997 found that men tended to be somewhat more risk tolerant than women spivey 2008 corroborated this finding using the nlsy79 grable and lytton 1998 and sung and hanna 1996 studied the responses to a subjective risk tolerance question in the survey of consumer finances scf and concluded that women were significantly less risk tolerant than men grable 2000 used a used a 20 item instrument to assess risk tolerance among faculty and staff at a university and also found that women were less risk tolerant than men researchers have also made inferences about women s risk tolerance based on observed wealth accumulation and investment choices using scf data jianakoplos and bernasek 1998 found that as individuals wealth increased the proportion of wealth held in risky assets increased for both men and women but the effect was significantly smaller for single women they concluded that single women were less risk tolerant than single men dwyer et al 2002 found that women took less risk than men in their mutual fund investment decisions however the impact of gender on risk taking was reduced significantly when controlling for the investor s financial knowledge

risking other people s money experimental evidence on the role of incentives and personality traits decision makers often face incentives to increase risk taking on behalf of others through bonus contracts and relative performance contracts we conduct an experimental study of risk taking on behalf of others using a large heterogeneous sample and find that people respond to such incentives without much apparent concern for stakeholders responses are heterogeneous and mitigated by personality traits the findings suggest that lack of concern for others risk exposure hardly requires financial psychopaths in order to flourish but is diminished by social concerns

is roger federer more loss averse than serena williams using data from the high stakes 2013 dubai professional tennis tournament we find that compared with a tied score i male players have a higher serve speed and thus exhibit more effort when behind in score and their serve speeds get less sensitive to losses or gains when score difference gets too large and ii female players do not change their serve speed when behind while serving slower when ahead thus male players comply more with prospect theory exhibiting more loss aversion and reflection effect our results are robust to controlling for player fixed effects and characteristics with player random effects

new evidence on the money s worth of individual annuities this paper presents new information on the expected present discounted value of payouts on individual life annuities the annuity we examine is the single premium immediate life annuity an insurance product that pays out a nominal level sum as long as the covered person lives in exchange for an initial lump sum premium this annuity offers protection against the risk of someone outliving his saving given uncertainty about longevity for reasonable estimates of behavioral parameters we calculate that individual annuities are currently priced so that retirees without bequest motives should find these policies of substantial value in configuring their portfolios to smooth retirement consumption we also find that the expected present discounted value of payouts relative to the initial cost of the annuity has increased over the last decade these findings bear on the policy debate regarding the role of individual choice and self reliance in retirement planning this abstract was borrowed from another version of this item

self selection and the forecasting abilities of female equity analysts this paper investigates whether there are systematic differences between the forecasting style and abilities of female and male analysts and whether market participants recognize these differences my key conjecture is that only female analysts with superior forecasting abilities enter the profession due to a perception of discrimination in the analyst labor market consistent with this conjecture i find that female analysts issue bolder and more accurate forecasts and their accuracy is higher in market segments in which their concentration is lower further the stock market participants are aware of the male female skill

the effects of perceived and actual financial literacy on financial behaviors a combined measure of financial literacy that includes both a test score of actual financial literacy and a self rating of overall financial literacy is used in this study we find that the combined measure appears to provide greater understanding about how financial literacy affects financial behaviors a large national survey of u s adults and households n 28 146 was used to investigate how this overall financial literacy is likely to change financial behaviors across five financial topics credit cards investments loans insurance and financial advice for each topic we include 4 5 financial behaviors 22 in total to demonstrate the consistency of the findings within and across topics although we are unable to identify a causal relationship the results from the probit analysis show that both actual and perceived financial literacy appear to influence financial behaviors and that perceived financial literacy may be as important as actual financial literacy jel d14 g00