NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Does Aggregated Returns Disclosure Increase Portfolio Risk-Taking?

John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian

NBER Working Paper No. 16868
Issued in March 2011
NBER Program(s):   AG   AP

Many previous experiments have found that participants invest more in risky assets if they (i) see their returns less frequently, (ii) see portfolio-level returns (rather than individual asset-by-asset returns), or (iii) see long-horizon (rather than one-year) historical asset class return distributions. In contrast, we find that such information aggregation treatments do not increase equity allocations in an experiment where—unlike previous experiments—participants invest in real mutual funds over the course of one year. In a follow-up experiment, we start with the classic Gneezy and Potters (1997) experimental design and modify it step-by-step to move closer to the design of our first experiment. Using this identification strategy, we show that previously documented aggregation effects are not robust to (i) changes in the distribution of the risky asset’s returns and (ii) the introduction of a multi-day delay between the initial portfolio choice and the realization of returns.

download in pdf format
   (1086 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

This paper is available as PDF (1086 K) or via email.

This paper was revised on February 9, 2015

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w16868

Users who downloaded this paper also downloaded these:
Beshears, Choi, Laibson, and Madrian w12659 Simplification and Saving
Beshears, Choi, Laibson, and Madrian How Does Simplified Disclosure Affect Individuals' Mutual Fund Choices?
Benartzi and Thaler w4369 Myopic Loss Aversion and the Equity Premium Puzzle
Heckman w17378 Integrating Personality Psychology into Economics
Avery, Chevalier, and Zeckhauser w17298 The "CAPS" Prediction System and Stock Market Returns
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us