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Faculty research seminar presentation

posted Dec 6, 2017, 5:54 AM by Stefan Palan   [ updated Dec 6, 2017, 5:57 AM ]
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.