Household Portfolio Underdiversification and Probability Weighting: Evidence from the Field
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DOI: 10.1093/rfs/hhaa131
Abstract: We test whether probability weighting affects household portfolio choice in a representative survey. On average, people display inverse-S-shaped probability weighting, overweighting low probability events. As theory predicts, probability weighting is positively associated with portfolio underdiversification… read more here.
Keywords: household portfolio; portfolio underdiversification; probability; probability weighting ... See more keywords