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| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Improving investment decisions with simulated experience |
| Organization Unit | |
| Authors |
|
| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Review of Finance |
| Publisher | Oxford University Press |
| Geographical Reach | international |
| ISSN | 1572-3097 |
| Volume | 19 |
| Number | 3 |
| Page Range | 1019 - 1052 |
| Date | 2015 |
| Abstract Text | We apply a new and innovative approach to communicating risks associated with financial products that should support investors in making better investment decisions. In our experiments, participants are able to gain "simulated experience" by random sampling of a previously described return distribution. We find that simulated experience considerably improves participants’ understanding of the underlying risk-return profile and prompts them to reconsider their investment decisions and to choose riskier financial products without regretting their higher risk-taking behavior afterwards. This method of experienced-based learning has high potential for being integrated into real-world applications and services. |
| Digital Object Identifier | 10.1093/rof/rfu021 |
| Other Identification Number | merlin-id:9444 |
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