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Risk Attitudes of Investment Bankers : Are they risk-lovers? Experiment and Survey on Investment Bankers

초록

영어

This paper investigates the risk attitudes of investment bankers with experiment and survey. The experiment measures risk preferences through multiple risky lottery choices, and the survey questionnaire explores the willingness to take instrumental and stimulating risks. We consider both traditional economic and psychological dimension. The investment bankers in our sample are more willing to take instrumental risks than other groups. Within the investment banker group, traders and analysts, who put financial theory into actual practice, show markedly higher levels of risk preference converging near risk-neutrality. Our results suggest that the nature and nurturing environment of investment bankers matters as well as compensation schemes and organization structure.

목차

ABSTRACT
 1. INTRODUCTION
 2. LITERATURE REVIEW
  2.1. Eliciting Risk Attitudes
  2.2. Heterogeneity and Correlations of Risk Attitudes
  2.3. Investment Banker Characteristics
  2.4. Identity and Preference Formation Theory
 3. HYPOTHESES DEVELOPMENT
  3.1. H1: Investment-banker hypothesis
  3.2. H2: Trader Hypothesis
  3.3. H3: Performance-factor hypothesis
  3.4. Income Hypothesis
  3.5. Experience Hypothesis
 4. DESIGN OF EXPERIMENT AND SURVEY
  4.1. Subjects
  4.2. Design
 5. ANALYSIS AND RESULTS
  5.1. Descriptive statistics
  5.2. Results – Economic Risk Attitudes
  5.3. Results – Psychological Risk Attitudes
  5.4. Result Summary
 6. DISCUSSIONS
  6.1. Risk Neutrality and Financial Decision-making Quality
  6.2. Distinguishing Power: Economic Risk Preference vs. Psychological Risk Preference
  6.3. Sample Selection Bias
 7. CONCLUDING REMARKS
 References

저자정보

  • JUNG SEOK WOO Hanyang University Business School
  • HYOUNG-GOO KANG Hanyang University Business School

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