130 research outputs found
The implications for market partecipants and regualators.
No full textEmpirical results of the research. Implication on the investment side. Implication on the debt side
Risk tolerance in financial decision making
No full text(editors)
This book sheds light on the emotional side of risk taking behaviour and is based on an innovative cross-disciplinary approach, mixing financial competences with others, related to psychology and affective neuroscience.
The book provides a deep theoretical background on the risk tolerance issue and holds the singular results of an empirical research aimed at investigating the emotional side of risk taking behaviour.
In the theoretical sections, traditional and behavioural approaches are considered to study both the investment and the debt decision process of individuals and households, respectively. The fallacy of traditional measures of responsible investing and borrowing suggests the choice for the introduction of a perspective coming from psychology and affective neuroscience.
The second part of the book describes our unique empirical research which involves more than 450 individuals: banks’ customers, bankers, traders and asset managers. The book proposes traditional and innovative measures of risk tolerance. The most innovative is a measure of the “unbiased risk tolerance” (UR) of individuals, which is the love or aversion to risk shown during a controlled experiment aimed at observing both the choices and the uncontrolled (somatic) responses to risky decisions. We employed a psycho-physiological test, named the Iowa Gambling Task (IGT), in order to evaluate the Skin’s Conductance Response (SCR) while making risky choices. The research compares the unbiased risk tolerance with both a measure for the biased risk tolerance (BR), obtained by a financial risk tolerance self-evaluation test and a measure of the risk tolerance shown in real-life investment/decision choices (RLR). Any difference between UR and BR shows whether individuals are able to properly self-evaluate their risk tolerance or not, over/under valuing their personal capability to afford financial risk. The comparisons among UR, BR and RLR are essential to understand what drives real-life risk taking behaviour: either who we are or who we suppose to be.
Results on both the investment and debt side are provided in order to depict the demographic-socio economical and cultural reasons which could explain incoherencies among UR, BR and RLR.
The book concludes with the implications involved by our results for market participants and for regulators. These implications appear even more relevant if connected to the new regulation of financial markets, introduced by MIFID, in terms of transparency and communication between intermediaries and customers
Decision Making: Psychological Perspective
No full textAnalysis of risk perception and sensitivity. Role of emotion in decision making. Neuroeconomics and psychological processes
La tolleranza al rischio nelle decisioni finanziarie: misurazioni biased ed unbiased
No full textIn alcuni comparti delle scienze della mente (psicologia, neuroscienze..), sembra ormai condiviso che le nostre decisioni scaturiscano dall’interazione continua tra processi razionali e processi emotivi. Questo contributo è un estratto preliminare di una ricerca volta ad approfondire alcuni aspetti della componente emotiva che interviene nell’assunzione del rischio in finanza. Si vuole comprendere, in particolare, se ed in quale misura la razionalità, che riteniamo guidi le nostre scelte finanziarie, subisca delle interferenze indotte dall’emotività.
Una collaborazione interdisciplinare tra studiosi di neuroscienze e di discipline finanziarie è alla base di una serie di esperimenti svolti su un campione vasto e stratificato di individui, con competenze differenti (clienti e dipendenti di banche, promotori finanziari, trader ed asset manager). Si pone a confronto la validità di misurazioni di tolleranza al rischio “classiche” (questionari) e di tecniche meno consuete per il mondo della finanza (test psico-fisiologici)
Risk Tolerance in the financial decision making
No full textThis book focuses on the risk tolerance which clearly influences financial decision making. The book holds the results of an empirical research aimed at investigating the emotional side of a risk taking behaviour, identifying any subjective obstacle restricting the individual ability to take conscious investment and debt decisions
Do emotions affect insurance demand?
No full textPurpose: The purpose of this paper is to explore how psychological variables are related to real-life insurance consumption. Specifically, we focus on whether emotions and psychological traits can improve the predictability of insurance demand, taking traditional socioeconomic variables under control.
Design/methodology/approach: The approach used was in-person survey, based on a traditional questionnaire, the Barratt Impulsiveness Scale and a psycho-physiological task (Iowa Gambling Task – IGT).
Findings: A selective role of emotions and psychological traits has been proven to exist when comparing different insurance policies. Life and casualty insurance are affected by emotional arousal to losses; indemnity insurance by fear of the unknown, whereas health insurance by impulsivity.
Research limitations/implications: Our findings indicate that individual insurance consumption may be amplified by not cognitive components. Future research should concentrate on testing the effect of further psychological traits related to pure risk coverage.
Practical implications: Our results may be of interest for insurers in order to know what drives insurance demand with respect to different kinds of pure risks.
Social implications: For policymakers, it is important to understand how psychological factors affect consumer behavior in order to incorporate such perspective into modern insurance policy measures. An analysis of such factors may also increase the self-consciousness of insurance consumers and enrich consumer self-protection.
Originality/value: We propose an interdisciplinary approach to analyze insurance demand and test different kinds of insurance coverage, suggesting not homogenous hedging behaviors in relation to specific ambiguous events
- …
