Determinants of investor expectations and satisfaction: A study with financial professionals

Rene Schwaiger; Michael Kirchler; Florian Lindner; Utz Weitzel

doi:10.1016/j.jedc.2019.03.002

Determinants of investor expectations and satisfaction: A study with financial professionals

Rene Schwaiger, Michael Kirchler^*, Florian Lindner, Utz Weitzel

^*Corresponding author for this work

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

We investigate determinants of price expectations and satisfaction levels of financial professionals and students. In experiments with 150 professionals and 576 students, we systematically vary price paths according to the final return (positive or negative) and the way in which the final return is achieved (upswing followed by downswing or vice versa). Professionals show the most optimistic price expectations and are most satisfied if assets fall in price first and then recover. In addition, professionals’ price expectations are highest after positive returns. Among students, qualitatively similar patterns emerge, but professionals’ price expectations are less prone to framing effects.

Original language	English
Article number	103675
Journal	Journal of Economic Dynamics and Control
Volume	110
Early online date	1 Jan 2019
DOIs	https://doi.org/10.1016/j.jedc.2019.03.002
Publication status	Published - Jan 2020

Keywords

Experimental finance
Financial professionals
Investor behavior
Investor satisfaction
Price expectations

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1-s2.0-S016518891930048X-mainFinal published version, 2.39 MBLicence: CC BY

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title = "Determinants of investor expectations and satisfaction: A study with financial professionals",

abstract = "We investigate determinants of price expectations and satisfaction levels of financial professionals and students. In experiments with 150 professionals and 576 students, we systematically vary price paths according to the final return (positive or negative) and the way in which the final return is achieved (upswing followed by downswing or vice versa). Professionals show the most optimistic price expectations and are most satisfied if assets fall in price first and then recover. In addition, professionals{\textquoteright} price expectations are highest after positive returns. Among students, qualitatively similar patterns emerge, but professionals{\textquoteright} price expectations are less prone to framing effects.",

keywords = "Experimental finance, Financial professionals, Investor behavior, Investor satisfaction, Price expectations",

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AB - We investigate determinants of price expectations and satisfaction levels of financial professionals and students. In experiments with 150 professionals and 576 students, we systematically vary price paths according to the final return (positive or negative) and the way in which the final return is achieved (upswing followed by downswing or vice versa). Professionals show the most optimistic price expectations and are most satisfied if assets fall in price first and then recover. In addition, professionals’ price expectations are highest after positive returns. Among students, qualitatively similar patterns emerge, but professionals’ price expectations are less prone to framing effects.

KW - Experimental finance

KW - Financial professionals

KW - Investor behavior

KW - Investor satisfaction

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Determinants of investor expectations and satisfaction: A study with financial professionals

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Keywords

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