Simultaneous Decisions Under Risk: An Experimental Investigation
54 Pages Posted: 12 Sep 2018 Last revised: 10 Dec 2020
Date Written: June 1, 2019
Subjects faced two independent portfolio choice problems simultaneously, each requiring an allocation of a budget across one safe and one risky asset. We found that choice for one of these problems could depend on the riskiness of the risky asset in the other. Results are consistent with subjects arriving at assessment of risk for any problem or portfolios in its feasible set through contrast with risk for the other problem or portfolios in its feasible set.
Keywords: portfolio choice, decision under risk, simultaneous decisions, risk contrast
JEL Classification: D01, D81
Suggested Citation: Suggested Citation