Do People Understand the Benefit of Diversification?

When consumers forecast the performance of a diversified (vs. undiversified) stock portfolio, two biases are prevalent. First, most people believe diversification increases a portfolio’s expected return. Second, many people believe diversification increases a portfolio’s expected volatility/risk. We examine the processes that underlie these biases and their potential downstream consequences.



Citation:

Nicholas Reinholtz, Philip Fernbach, and Bart de Langhe (2016) ,"Do People Understand the Benefit of Diversification?", in NA - Advances in Consumer Research Volume 44, eds. Page Moreau, Stefano Puntoni, and , Duluth, MN : Association for Consumer Research, Pages: 190-194.

Authors

Nicholas Reinholtz, University of Colorado, USA
Philip Fernbach, University of Colorado, USA
Bart de Langhe, University of Colorado, USA



Volume

NA - Advances in Consumer Research Volume 44 | 2016



Share Proceeding

Featured papers

See More

Featured

Cohesion or Coercion? Why Coordinated Behavior Backfires in Marketing Contexts

Noah VanBergen, University of Cincinnati, USA

Read More

Featured

Cultivating Collaboration and Value Cocreation in Consumption Journeys

Melissa Archpru Akaka, University of Denver
Hope Schau, University of Arizona, USA

Read More

Featured

Search Predicts and Changes Patience in Intertemporal Choice

Crystal Reeck, Temple University, USA
Lee Byung, Columbia University, USA
Eric J Johnson, Columbia University, USA

Read More

Engage with Us

Becoming an Association for Consumer Research member is simple. Membership in ACR is relatively inexpensive, but brings significant benefits to its members.