Corinna Blasch completes research stay in Mannheim

From September 2017 through November 2017 , Corinna Blasch completed a research stay in Mannheim at the department of Prof. Theissen (University of Mannheim) to work on a joint project. During her stay she had the opportunity to attend weekly finance seminars, where scientists from renowned institutions (e.g. HEC Paris, Chicago Booth School of Business, NYU Stern School of Business) were invited to present their research. In the future, Corinna is aiming to stay in touch with the researchers from Mannheim and foster the collaboration between the institutions. The research stay was financially supported by the German Academic Exchange Service (DAAD).

Second research day 2017

On December 14, 2017, the platform held its biannual research day. A record 20 researchers attended this second such event in 2017. The program featured six presentations by speakers from the Universities of Graz, Innsbruck and Klagenfurt and the University of Applied Sciences Joanneum. The topics ranged from an experiment on insider trading, via financial education, director's dealings, hedge fund investments, and online subject recruitment to burning issues like the performance of cryptocurrencies.

An overview of this issue's program is available from the meetings page. We look forward to the upcoming research days in 2018, which will be held on June 14 and December 13.

Ines Wöckl joins research platform

Ines Wöckl has joined the Department of Finance as a research assistant in October 2017. She focused her master thesis on performance attribution for single currency fixed-income portfolios, providing a compact overview of existing fixed-income performance attribution models and evaluating their advantages and disadvantages as well as their suitability for different investment scenarios. Ines will be giving her first course together with Claudia Fink and Corinna Blash in the upcoming semester (VU Finance, SS 2018). Regarding her research, Ines intends to focus on the detection of bubbles in financial markets.

Faculty research seminar presentation

The School of Business, Economics and Social Sciences at the University of Graz holds a weekly research seminar, where members of the faculty present their latest projects and papers. On December 6, 2017, Stefan Palan presented his paper titled "Does Investor Risk Perception Drive Asset Prices?", which he co-authored with Jürgen Huber (University of Innsbruck) and Stefan Zeisberger (Radboud University Nijmegen).

Stefan reported that experimental subjects' perceptions of what constitutes a risky investment is primarily driven by the probability of suffering a loss and that this perception is carried over to markets. Investments which carry a greater probability of suffering a loss trade at significantly lower prices than investments which promise only gains, despite equal average returns.

For details, see the working paper "Does Investor Risk Perception Drive Asset Prices in Markets? Experimental Evidence".

Workshop of the Austrian Working Group on Banking and Finance

On November 24-25, the Austrian Working Group on Banking and Finance held its 32^nd meeting. In the picturesque surroundings of the University Sports Center in Obergurgl, Tyrol, 23 participants from universities and research institutions in Austria, Liechtenstein and Switzerland came together to discuss issues ranging from Basel risk weights via agricultural commodity prices to activist hedge funds.

FiRe was represented by Stefan Palan and Christoph Rohner, who reported new findings on risk perception and director's dealings. See the program below for details on the research presentations.

Program of the 32nd workshop of the Austrian Working Group on Banking and Finance

Substantial media echo on FiRe researcher's study

A new paper by FiRe researcher Stefan Palan, co-authored with Michael Kirchler from the University of Innsbruck, has been accepted at Experimental Economics. Titled "Immaterial and Monetary Gifts in Economic Transactions. Evidence from the Field.", the paper explores the effect of complimenting or tipping the salesperson in a fast-food restaurant on the amount of ice cream or the weight of durum doner provided. The twist about the design is that the authors give the compliment or tip prior to the product's preparation.

The study finds that giving a compliment results in about 10% more ice cream in the cone, and tipping (about 10%) results in about 17% more ice cream. In the picture to the right, the left-hand cone was ordered normally, while the right-hand cone resulted from ordering and adding the sentence "You have the best ice cream in town".

In the case of the durum doner, the effects are not as strong (it is harder to pack more ingredients into a fixed-size bread), but in the compliment treatment, they increase over time. When expeirmenters visit the same salesperson five days in a row, doner weight increases by 7% (23g) relative to the baseline when the experimenters compliment, while it stays relatively constant at 4% (17g) higher than in the baseline when they tip.

There has also been significant media reaction to the publication. A selection (see the full list on Stefan Palan's website):

• Die Presse (German)

• Frankfurter Allgemeine Zeitung (German)

• Handelsblatt (German)

• Kronen Zeitung (German)

• Der Standard (German)

• Süddeutsche Zeitung (German)

See the published version (open access) for further information.

"Die Presse" reports on Palan's insider trading research

"Die Presse", one of Austria's leading daily newspapers, recently published an article on research conducted by platform member Stefan Palan and his co-author Thomas Stöckl. Palan and Stöckl investigated the effect of insider trading legislation on market efficiency and on informed and uninformed traders' profits. The findings show that forbidding insider trading reduces the informational efficiency of markets and does not benefit uninformed traders' profits. Palan and Stöckl's work is currently a forthcoming paper in Journal of Financial Markets.

The German-language article in "Die Presse" is titled "Der Börse sind Paragraphen egal" and can be viewed on the newspaper's website.

Gerhard Lechner joins research platform

Gerhard Lechner has recently joined the research platform as our first member from the University of Applied Sciences Joanneum. Gerhard is Senior Lecturer at the Institute of Banking and Insurance there. He teaches economics, monetary policy and insurance in both the bachelor’s and master’s programmes. Gerhard studied Economics and Philosophy, gaining a PhD in Philosophy. His fields of research are monetary economics, ethical and social banking, alternative finance and financial economics. Prior to joining academia, he worked in the banking sector (Raiffeisen Zentralbank) as a financial market analyst and in the insurance sector (UNIQA) as an analyst in asset management.

Christian Schitter receives Marshall Plan scholarship

Research platform member Christian Schitter is the recipient of a prestigious scholarship from the Austrian Marshall Plan Foundation. The foundation funds a three-month research stay of Christian at UC Berkeley this autumn. There, Christian will continue his research into behavioral determinants of honesty.

Christoph Rohner joins research platform

Christoph Rohner today joined the research platform as our second member from the University of Klagenfurt. Christoph focused his master thesis on Cover's universal portfolio, comparing its performance using empirical and simulated random data. Christoph is currently working on directors' dealings and intends to focus his PhD thesis on market efficiency in low-liquidity markets.