We investigate how volatility shocks influence investments into a risky asset, perceptions about the asset’s risk, its future price/return development, and investor satisfaction. We run investment experiments mimicking volatility shocks with two subject pools (financial professionals and students) in two waves: one during a comparatively tranquil stock market period in December 2019 and one during the volatile period of March 2020 caused by the Covid-19 pandemic. In the experiments, participants take investment decisions in six treatments differing in (i) the direction of the volatility shock (down, up, straight) and (ii) the presentation format of the time series (prices or returns). We particularly investigate the influence of changes in risk preferences, triggered by the Covid-19 pandemic, on investment behavior in the experiment.
Lead investigator: | Christoph Huber |
Affiliation: | University of Innsbruck |
Primary topic: | |
Region of data collection: | |
Country of data collection | |
Status of data collection | |
Type of data being collected: | |
Unit of real-time data collection | |
Start date | 12/2019 |
End date | 3/2020 |
Frequency |
