The Diversification Paradox: How Lay Investors Perceive Risk and Covariance Information
Lay investors erroneously believe that investing in negatively correlated assets increases portfolio risk. They paradoxically diversify risk better when encouraged to take risks, than when trying to minimize risk. The design of financial menus and flawed financial knowledge explain this paradox. We experiment diverse solutions to improve diversification.
Yann Cornil and Yakov Bart (2013) ,"The Diversification Paradox: How Lay Investors Perceive Risk and Covariance Information", in NA - Advances in Consumer Research Volume 41, eds. Simona Botti and Aparna Labroo, Duluth, MN : Association for Consumer Research, Pages: .
Yann Cornil, INSEAD, France
Yakov Bart, INSEAD, Singapore
NA - Advances in Consumer Research Volume 41 | 2013
Brand’s Moral Character Predominates in Brand Perception and Evaluation
Mansur Khamitov, Nanyang Technological University, Singapore
Rod Duclos, Western University, Canada
Consumers’ Implicit Mindsets and Responses to Cause-related Marketing Campaigns
Meng-Hua Hsieh, Kent State University, USA
Ozge Yucel-Aybat, Pennsylvania State University Harrisburg
Effects of Retail Food Sampling on Subsequent Purchases: Implications of Sampling Healthy versus Unhealthy Foods on Choices of Other Foods
Dipayan Biswas, University of South Florida, USA
Jeffrey Inman, University of Pittsburgh, USA
Johanna Held, University of Bayreuth