| 1. |
- Gärling, Tommy, 1941, et al.
(författare)
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Fast and slow investments in asset markets: Influences on risk taking
- 2021
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Ingår i: Journal of Behavioral Finance. - : Informa UK Limited. - 1542-7560 .- 1542-7579. ; 22:1, s. 84-96
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Tidskriftsartikel (refereegranskat)abstract
- © 2020, © 2020 The Author(s). Published with license by Taylor & Francis Group, LLC. The aim is to investigate whether elevated risk taking in asset market experiments driven by rank-based performance incentives decrease if removing a time limit on choices and minimizing complexity of strategic optimization. In a scenario experiment, business school students (n = 123) acting as investment managers in a fund company make investments at self-paced rates. The results show that investments are influenced by rank-based compensations implemented as a relative comparison standard but not that risk taking is elevated. The motive to minimize losses relative to others appear to counteract risk taking, particularly if poor performance is penalized by reducing the fixed income.
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| 2. |
- Gärling, Tommy, 1941, et al.
(författare)
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Fast and Slow Investments in Asset Markets: Influences on Risk Taking
- 2019
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Ingår i: Behavioral Finance Working Group Conference. London: 6-7 June 2019.
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Konferensbidrag (övrigt vetenskapligt/konstnärligt)abstract
- In an experiment business school students (n=123) role play being investment managers in a fund company incentivized by rank-based performance compensations. Investments are made at self-paced rates in stocks with normal return distributions varying in expected value and variance. Results show that investments increase above but decrease and are relatively more risky below a relative comparison standard. Above the comparison standard, hypothetical monetary bonuses do not increase risk taking more than non-monetary bonuses, while below the comparison standard hypothetical monetary penalties suppress risk taking more than non-monetary penalties do. Compared to a control condition with no relative comparison standard and hypothetical incentives, risk taking is lower below but not different above the comparison standard. The difference in results suggest that time pressure and complexity of strategic optimization are determinants of elevated risk taking in asset market experiments investigating effects of rank-based performance compensations.
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| 3. |
- Carlander, Anders, 1979, et al.
(författare)
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Choices of savings options related to trust in banks’ competence, benevolence and stability
- 2013
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Ingår i: Journal of Financial Services Marketing. - : Springer Science and Business Media LLC. - 1363-0539 .- 1479-1846. ; 18:2, s. 121-136
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Tidskriftsartikel (refereegranskat)abstract
- The study investigates whether beliefs in professional investor skill in conjunction with trust in banks and other fund managers explain choices of options for long-term savings. From questionnaire data obtained for a population-based sample (n=178) and a sample of undergraduates (n=186), two index measures were constructed, one of beliefs in the skill of professional investors and another of trust in fund managers. The trust index was aggregated for the three interrelated components: competence, benevolence and stability. Regression analyses of the likelihood of savings in an actively managed fund showed an expected effect of investor-skill beliefs that was mediated by trust in the fund manager. In addition, self-reported knowledge played a larger role than trust for choices of passively managed index funds and in particular for own investment in stocks.
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| 4. |
- Carlander, Anders, 1979, et al.
(författare)
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The role of perceived quality of personal service in influencing trust and satisfaction with banks
- 2018
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Ingår i: Financial Services Review. - 1057-0810. ; 27, s. 83-98
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Tidskriftsartikel (refereegranskat)abstract
- Trust is of paramount importance to banks. Previous research has shown that trust increases with repeated personal contacts. We investigate if this applies to the customer-employee relationship in banks. Data from an on-line survey of 293 customers of Swedish retail banks are used to construct indicator measures. By means of structural equation modeling we find that trust in the bank is influenced by perceived quality of personal service through employees’ perceived competence, perceived benevolence, and perceived transparency, and that satisfaction with the bank is influenced by perceived quality of personal service through perceived competence, perceived benevolence, perceived transparency, and trust.
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| 5. |
- Gärling, Tommy, 1941, et al.
(författare)
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Financial risk-taking related to individual risk preference, social comparison and competition
- 2021
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Ingår i: Review of Behavioral Finance. - 1940-5979. ; 13:2, s. 125-140
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Tidskriftsartikel (refereegranskat)abstract
- Purpose – The purpose of this paper is to investigate how social comparison and motivation to compete account for elevated risk-taking in fund management corroborated by asset market experiments when performance depends on rank-based incentives. Design/methodology/approach – In two laboratory experiments, university students (n1 5 240/n2 5 120) make choices between risky and certain outcomes of hypothetical sums of money. Both experiments investigate in which direction risky choices in an individual condition (individual risk preference) are shifted when participants compare their performance to another participant’s performance (social comparison), being instructed or not to outperform the other (incentive to compete). Findings – In the absence of incentives to compete, participants tend to minimize the differences between expected outcomes to themselves and to the other, but when provided with incentives to compete, they tend to maximize these differences. An independent additional increase in risk-taking is observed when participants are provided with incentives to compete. Originality/value – Original findings include that social comparison does not evoke motivation to compete unless incentives are offered and that increases in risk-taking depend both on what the other chooses and the incentives.
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| 6. |
- Hauff Carlsson, Jeanette, 1965, et al.
(författare)
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Breaking the ice of low financial involvement: Does narrative information format from a trusted sender increase savings in mutual funds?
- 2016
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Ingår i: International Journal of Bank Marketing. - 0265-2323. ; 34:2, s. 151-170
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Tidskriftsartikel (refereegranskat)abstract
- Purpose – The purpose of this paper is to investigate how trust in the sender of financial information and a narrative vs fact-related format of the information influence intentions to save in a mutual fund. Design/methodology/approach – In Experiment 1, 186 undergraduates participate and in Experiment 2, 434 Swedish citizens between 18 and 70 years randomly chosen from a consumer panel. In both experiments participants are randomized to two conditions in which they are presented with the same information about a mutual fund in a narrative or a traditional fact-related format. In four different between-groups conditions crossed with information format, pre-tested descriptions of different fictitious banks are presented. The descriptions are combined in a fractional factorial design such that one bank is low in the three trust determinants of competence, benevolence and transparency, whereas the other three banks are high in one of the trust determinants but lower in the others. Ratings are made of the information with respect to how much positive affect the information evokes, interest in the message and intention to save in the mutual fund. Findings – In both experiments the narrative compared to the fact-based information format increases positive affect, interest and intention to save. Trust in the bank has an independent effect of increasing the intention to save. Practical implications – The narrative format of financial information may be key to increase involvement in financial choices but needs to be supplemented by a message that reinforces the positive affect and interest evoked by the format. Originality/value – A demonstration of how a narrative format of financial information and trust in the sender jointly influence intentions to save in a mutual fund.
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| 7. |
- Dijk, Oege, et al.
(författare)
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Rank matters-The impact of social competition on portfolio choice
- 2014
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 66, s. 97-110
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Tidskriftsartikel (refereegranskat)abstract
- Tournament incentives' schemes have been criticized for inducing excessive risk-taking among financial market participants. In this paper we investigate how relative performance-based incentive schemes and status concerns for higher rank influence portfolio choice in laboratory experiments. We find that both underperformers and over-performers adapt their portfolios to their current relative performance, preferring either positively or negatively skewed assets, respectively. Most importantly, these results hold both when relative performance is instrumental for higher payoffs in a tournament and when it is only intrinsically motivating and not payout-relevant. We find no effects when no relative performance information is given. © 2013 Elsevier B.V.
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| 8. |
- Holmén, Martin, 1966, et al.
(författare)
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Do anti-takeover devices affect the takeover likelihood or the takeover premium?
- 2014
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Ingår i: European Journal of Finance. - 1351-847X .- 1466-4364. ; 20:4, s. 319-340
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Tidskriftsartikel (refereegranskat)abstract
- In this paper, we use Heckman selection models to analyse the relation between the likelihood of the firm becoming a takeover target, the takeover premium, and the use of anti-takeover devices. Ordinary least squares regressions suggest that anti-takeover devices, especially dual class shares, are associated with a higher takeover premium. However, we also document that anti-takeover devices reduce the likelihood that the firm will be taken over. When we control for the fact that takeover targets are selected, we do not find a significant relation between the takeover premium and dual class shares. Hence, our results suggest that the takeover premium is indeed influenced by private information about the likelihood of takeover.
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| 9. |
- Holmén, Martin, 1966, et al.
(författare)
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Do option-like incentives induce overvaluation? Evidence from experimental asset markets
- 2014
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Ingår i: Journal of Economic Dynamics and Control. - : Elsevier BV. - 0165-1889. ; 40, s. 179-194
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Tidskriftsartikel (refereegranskat)abstract
- One potential reason for bubbles evolving prior to the financial crisis was excessive risk taking stemming from option-like incentive schemes in financial institutions. By running laboratory asset markets, we investigate the impact of option-like incentives on price formation and trading behavior. The main results are that (i) we observe significantly higher market prices with option-like incentives than linear incentives. (ii) We further find that option-like incentives provoke subjects to behave differently and to take more risk than subjects with linear incentives. (iii) We finally show that trading at inflated prices is rational for subjects with option-like incentives since it increases their expected payout. © 2014 Elsevier B.V.
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| 10. |
- Holmén, Martin, 1966, et al.
(författare)
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Pyramid IPOs on the Chinese Growth Enterprise Market
- 2015
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Ingår i: Emerging markets finance & trade. - 1540-496X. ; 51:1, s. 160-173
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Tidskriftsartikel (refereegranskat)abstract
- In this article, we investigate initial public offerings (IPOs) of high-tech firms on the Chinese Growth Enterprise Market (GEM). Almost half of the GEM IPOs are set up in pyramid structures. The likelihood of a pyramid structure increases with the size of the IPO firm and state control. Our results do not suggest that pyramids are set up to overcome financial constraints. However, we document that pyramid IPOs are discounted before the IPO. The subscription price-to-book ratio is significantly lower for pyramid IPOs, and this translates into higher underpricing. We conclude that IPO investors demand a higher risk premium when investing in pyramid IPOs.
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