Publication type: Working paper – expertise – study
Title: Responsibility sharing, beliefs and risk taking
Authors : Bachmann, Kremena
et. al : No
DOI : 10.2139/ssrn.2862308
Extent : 21
Issue Date: 1-Nov-2016
Publisher / Ed. Institution : Social Science Research Network
ISSN: 1556-5068
Language : English
Subjects : Risk taking; Delegation; Emotion; Cognitive dissonance; Disposition effect; Reversed disposition effect
Subject (DDC) : 658.4: Executive Management
Abstract: This paper analyzes experimentally whether responsibility sharing can reduce the emotionally motivated aspiration to bias beliefs toward previous decisions and whether this influences the subsequent investment behavior. The results suggest that decision-makers tend to form beliefs that justify the previous investment decisions. A stronger risk taking motivates more optimistic beliefs, in particular if it leads to losses. Sharing the responsibility for the risk taking reduces the bias in the beliefs and this helps decision-makers to reduce the risk taking and limit the losses. The results suggest that there is a beliefs channel, which explains why investors find it easier to realize losses with actively managed funds than losses with stocks.
License (according to publishing contract) : Licence according to publishing contract
Departement: School of Management and Law
Organisational Unit: Institute of Wealth & Asset Management (IWA)
Appears in Collections:Publikationen School of Management and Law

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