Stated and Revealed Investment Decisions Concerning Structured Products
Swiss National Bank, International Monetary Relations
University of Basel; Swiss Finance Institute
April 4, 2008
Journal of Banking and Finance, Forthcoming
We analyze the investment behavior of private clients concerning structured products. To ascertain their stated and revealed preferences, we use a questionnaire and a field experiment, respectively. The real product issued in the field experiment is comparable to the hypothetical product in the questionnaire in both payoff and communication. We find that a product described in simple words strongly motivates people to invest in structured products for the first time, and also eliminates gender differences. The latter result also appears under true market conditions for the real product. However, the real product attracts far fewer first-time buyers than we expected from the questionnaire results. The size and distribution of the investment amounts are different in the two set-ups: although the questionnaire participants focus on their annual income situation, field experiment participants focus on wealth.
Number of Pages in PDF File: 26
Keywords: Field Experiment, Behavioral Finance, Structured Products, Revealed Preferences, Stated Preferences
JEL Classification: G14, G19, D81, E22
Date posted: June 11, 2007 ; Last revised: January 5, 2010
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