Friday Meeting - Sébastien Duchêne (GREDEG-UNS-UCA)

"Financial Market Professionals’ Higher Order Risk Attitudes"
Quand ? Le 13-04-2018,
de 10:00 à 12:00
Où ? ISEM - Salle SCI
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Title: "Financial Market Professionals’ Higher Order Risk Attitudes"

Auteurs: Anna Bottasso, Sébastien Duchêne, Eric Guerci, Nobuyuki Hanaki and Charles Noussair


Abstract: Individual risk attitudes have been widely studied in the context of economic and financial decisions (Sapienza et al., 2009 ; Cohn et al., 2015). In particular, the analysis of risk aversion (Pratt, 1964 ; Richard 1975) and its impact on individual decision making has been investigated. More recently, higher order risk attitudes, such as prudence and temperance have also been studied (for a review, see Trautmann and van de Kuilen, 2018). This work proposes the first attempt to study financial market professionals in a "field in the lab" experiment to observe risk aversion, prudence and temperance, and link them with variables considering the professional environment of subjects, their jobs and trading strategies. Indeed, the data from 173 professionals was collected at the 30st International Federation of Technical Analysts (IFTA) Conference, which was held at Milan (Italy), at the Excelsior Hotel Gallia, from October Friday 13 to Sunday 15, 2017. To elicit prudence and temperance, we reproduced the experimental protocol proposed by Noussair et al. (2014) who built their experiment from the theoretical framework of Eeckhoudt and Schlesinger (2006) and we compare our results to the sample data collected by Noussair et al. (2014) through a lab experiment with students and an online survey with ordinary people. The results confirm the risk seeking attitude of professionals with respect to non-professionals, whereas about temperate choices in professionals there are no significant differences from the other samples.