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Stated and Revealed Investment Decisions Concerning Structured Products

26 Pages Posted: 11 Jun 2007 Last revised: 5 Jan 2010

Barbara Doebeli

Swiss National Bank, International Monetary Relations

Paolo Vanini

University of Basel

Date Written: April 4, 2008

Abstract

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.

Keywords: Field Experiment, Behavioral Finance, Structured Products, Revealed Preferences, Stated Preferences

JEL Classification: G14, G19, D81, E22

Suggested Citation

Doebeli, Barbara and Vanini, Paolo, Stated and Revealed Investment Decisions Concerning Structured Products (April 4, 2008). Journal of Banking and Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=991868 or http://dx.doi.org/10.2139/ssrn.991868

Barbara Doebeli (Contact Author)

Swiss National Bank, International Monetary Relations ( email )

Borsenstrasse 15
CH-8022 Zurich
Switzerland
+41 1 631 37 27 (Phone)
+41 1 631 39 80 (Fax)

Paolo Vanini

University of Basel ( email )

Petersplatz 1
Basel, CH-4003
Switzerland

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