26 Pages Posted: 11 Jun 2007 Last revised: 5 Jan 2010
Date Written: April 4, 2008
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: 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
By Rene Fischer