Domain-specific risk-taking among finance professionals

Michael Razen; Michael Kirchler; Utz Weitzel

doi:10.1016/j.jbef.2020.100331

Domain-specific risk-taking among finance professionals

Michael Razen^*
, Michael Kirchler
, Utz Weitzel

^*Corresponding author for this work

Finance

Research output: Contribution to Journal › Article › Academic › peer-review

Abstract

Risk-assessment and risk-taking in various forms are among the most important tasks financial professionals face in their daily work. A large body of experimental studies has shown a substantial effect of the decision domain (gain vs loss domain) on risk-taking, predominantly among students. In a series of experiments set in different contextual frameworks, we investigate whether this domain effect is also present among experienced employees in the finance industry and compare their decisions with people from the general population. Our results show that employees in the finance industry are equally prone to the domain effect in risk-taking than the general population. Interestingly, for domain-specific risk-taking in a finance context, we find that professionals are even more reluctant to sell loser stocks than non-professionals.

Original language	English
Article number	100331
Pages (from-to)	1-7
Number of pages	7
Journal	Journal of Behavioral and Experimental Finance
Volume	27
Early online date	28 Apr 2020
DOIs	https://doi.org/10.1016/j.jbef.2020.100331
Publication status	Published - Sept 2020

Funding

We thank Felix Holzmeister, Jürgen Huber, and Rene Schwaiger for valuable comments. We are grateful to Claudia Presslaber for excellent research assistance. Financial support from the Austrian Science Fund FWF (START-grant Y617-G11 and SFB F63 ), Radboud University, The Netherlands , and the Swedish Research Council (grant 2015-01713 ) is gratefully acknowledged. This study was ethically approved by the IRB of the University of Innsbruck. Data and code are posted on the Open Science Framework (OSF): https://osf.io/924n6/ .

Funders	Funder number
Open Science Framework
Austrian Science Fund	SFB F63, Y617-G11
Vetenskapsrådet	2015-01713
Radboud Universitair Medisch Centrum
Universität Innsbruck

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 16 Peace, Justice and Strong Institutions

Keywords

Domain-specific risk-taking
Experimental finance
Financial professionals

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10.1016/j.jbef.2020.100331

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Domain-specific risk-taking among finance professionals

Abstract

Funding

UN SDGs

Keywords

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