Explaining the Demand for Structured Financial Products: Survey and Field Experiment Evidence

19 Pages Posted: 20 Oct 2010  

Marc Oliver Rieger

University of Trier

Thorsten Hens

University of Zurich - Department of Banking and Finance; Norwegian School of Economics and Business Administration (NHH); Swiss Finance Institute (Zurich Center)

Date Written: October 19, 2010

Abstract

In many countries structured investment products are popular among retail investors. We explain the demand for these products using unique field data where we let subjects freely design their "favorite" structured product. Results suggest that the supply with capital protected products (guarantee certificates) might indeed be demand-driven. This does not seem to be the case for other product categories where marketing and sales practices might play a more important role. In a survey among financial practitioners we find furthermore that a demand for capital protected products can be explained by loss aversion and saving motifs, e.g. for buying a house.

Keywords: Structured financial products, capital protected products, loss aversion

JEL Classification: D84, G11, G21, C9

Suggested Citation

Rieger, Marc Oliver and Hens, Thorsten, Explaining the Demand for Structured Financial Products: Survey and Field Experiment Evidence (October 19, 2010). Available at SSRN: https://ssrn.com/abstract=1694373 or http://dx.doi.org/10.2139/ssrn.1694373

Marc Oliver Rieger (Contact Author)

University of Trier ( email )

15, Universitaetsring
Trier, 54286
Germany

HOME PAGE: http://www.banking-finance.uni-trier.de

Thorsten Hens

University of Zurich - Department of Banking and Finance ( email )

Plattenstrasse 32
Zurich, 8032
Switzerland
+41-44 634 37 06 (Phone)

Norwegian School of Economics and Business Administration (NHH)

Helleveien 30
Bergen, 5045
Norway

Swiss Finance Institute (Zurich Center)

c/o University of Geneve
40, Bd du Pont-d'Arve
1211 Geneva, CH-6900
Switzerland

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