Abstract

http://ssrn.com/abstract=915382
 
 

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Is There a Pessimistic Bias in Individual Beliefs? Evidence from a Simple Survey


Selima Ben Mansour


Université Paris-Dauphine

Elyes Jouini


Universite de Paris 9 Dauphine - CEREMADE

Clotilde Napp


CNRS and Université Paris-Dauphine

July 7, 2006


Abstract:     
It is an important issue for economic and finance applications to determine whether individuals exhibit a behavioral bias towards pessimism in their beliefs, in a lottery or more generally in an investment opportunities framework. In this paper, we analyze the answers of a sample of 1,540 individuals to the following question Imagine that a coin will be flipped 10 times. Each time, if heads, you win 10€. How many times do you think that you will win? The average answer is surprisingly about 3.9 which is below the average 5, and we interpret this as a pessimistic bias. We find that women are more pessimistic than men, as are old people relative to young. We also analyze how our notion of pessimism is related to more general notions of pessimism previously introduced in psychology.

Number of Pages in PDF File: 21

Keywords: Pessimism, judged probability, lottery

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Date posted: July 16, 2006  

Suggested Citation

Mansour, Selima Ben and Jouini, Elyes and Napp, Clotilde, Is There a Pessimistic Bias in Individual Beliefs? Evidence from a Simple Survey (July 7, 2006). Available at SSRN: http://ssrn.com/abstract=915382 or http://dx.doi.org/10.2139/ssrn.915382

Contact Information

Selima Ben Mansour
Université Paris-Dauphine
223 Rue Saint-Honore
Paris, 75775
France
Elyes Jouini (Contact Author)
Universite de Paris 9 Dauphine - CEREMADE ( email )
Place du Marechal de Lattre de Tassigny
Paris Cedex 16, 75775
France
+ 33 1 44 05 46 75 (Phone)
+ 33 1 44 05 45 99 (Fax)
Clotilde Napp
CNRS and Université Paris-Dauphine ( email )
Place de Lattre de Tassigny
Paris, 75775
France
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