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|Title||Presentation Forms and Risk-Taking Behavior of Investors|
|Institution||University of Zurich|
|Faculty||Faculty of Economics, Business Administration and Information Technology|
|Number of Pages||42|
|Abstract Text||In this paper we test several presentation forms on their ability to support investors in making investment decisions that optimally match their risk-return prole. As well as includ- ing the numerously investigated formats description and experience sampling, we also analyze four communicating methods that are less arduous to implement than simulated experience methods but more sophisticated than numerical descriptions. We nd that 10-state-diagrams could become an interesting alternative to simulated experience: they signicantly improve subjects' perception of asset risks and returns and furthermore encourage investors to higher risk-taking without causing lower satisfaction with allocation decisions in hindsight. Moreover, our studies suggest the use of absolute monetary values over relative percentage returns. We do not propose to make the choice of presentation form dependent on the investment horizon.|