{"id":3221,"date":"2023-10-03T12:31:33","date_gmt":"2023-10-03T10:31:33","guid":{"rendered":"https:\/\/flex.uni-frankfurt.de\/?p=3221"},"modified":"2023-10-03T12:31:33","modified_gmt":"2023-10-03T10:31:33","slug":"how-to-alleviate-correlation-neglect-in-investment-decisions","status":"publish","type":"post","link":"https:\/\/flex.uni-frankfurt.de\/index.php\/publications\/how-to-alleviate-correlation-neglect-in-investment-decisions\/","title":{"rendered":"How to Alleviate Correlation Neglect in Investment Decisions"},"content":{"rendered":"<div class=\"custom-pagination-text-research-img\"><a href=\"https:\/\/doi.org\/10.1287\/mnsc.2022.4535\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-3089\" src=\"https:\/\/flex.uni-frankfurt.de\/wp-content\/uploads\/2023\/10\/cover-2.png\"\" width=\"193\" height=\"261\" \/><\/a><\/div>\n<div class=\"custom-pagination-text-research-content\">Christine Laudenbach , Michael Ungeheuer &#038; Martin Weber,\u00a0 2023, <em>Management Science, <\/em>69 (6), 3400-3414<em><br \/>\n<\/em><\/p>\n<div><\/div>\n<div class=\"custom-pagination-text-research-content\">\n<p><!--more Continue reading--><\/p>\n<div class=\"custom-pagination-text-research-content\"><a href=\"https:\/\/doi.org\/10.1287\/mnsc.2022.4535\">link to publication<\/a><\/div>\n<div class=\"custom-pagination-text-research-abstract\">Abstract:<br \/>\nWe experimentally study how presentation formats for return distributions affect investors\u2019 diversification choices. We find that sampling returns alleviates correlation neglect and constitutes an effective way to improve financial decisions. When participants get a description of the probabilities for outcomes of the joint return distribution, we confirm the findings of others that investors neglect the correlation between assets in their diversification choices. However, when participants sample from the joint distribution, they change their allocation between two assets in response to a change in their correlation in the predicted direction. The results are robust across two experiments that have participants with varying experience (students versus private investors).<\/div>\n<\/div>\n<\/div>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-3221","post","type-post","status-publish","format-standard","hentry","category-publications"],"_links":{"self":[{"href":"https:\/\/flex.uni-frankfurt.de\/index.php\/wp-json\/wp\/v2\/posts\/3221","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flex.uni-frankfurt.de\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flex.uni-frankfurt.de\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flex.uni-frankfurt.de\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/flex.uni-frankfurt.de\/index.php\/wp-json\/wp\/v2\/comments?post=3221"}],"version-history":[{"count":1,"href":"https:\/\/flex.uni-frankfurt.de\/index.php\/wp-json\/wp\/v2\/posts\/3221\/revisions"}],"predecessor-version":[{"id":3223,"href":"https:\/\/flex.uni-frankfurt.de\/index.php\/wp-json\/wp\/v2\/posts\/3221\/revisions\/3223"}],"wp:attachment":[{"href":"https:\/\/flex.uni-frankfurt.de\/index.php\/wp-json\/wp\/v2\/media?parent=3221"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flex.uni-frankfurt.de\/index.php\/wp-json\/wp\/v2\/categories?post=3221"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flex.uni-frankfurt.de\/index.php\/wp-json\/wp\/v2\/tags?post=3221"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}