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Licensed Unlicensed Requires Authentication Published by De Gruyter November 30, 2019

Portfolio Choice in the Presence of Non-Tradable Income: An Experimental Analysis

  • Alexander Klos and Martin Weber
From the journal German Economic Review

Abstract

This paper reports the results of an experiment on portfolio choice in the presence of non-tradable income. The non-tradable income part could either be riskless or risky (background risk). In many cases, we observe behavior that is qualitatively consistent with the predictions of normative theory. However, correlations between financial and non-tradable wealth are neglected. The computation of aggregated risk profiles helps subjects to partly overcome the deviations from normative theory due to neglect of correlations.

Published Online: 2019-11-30
Published in Print: 2006-12-01

© 2019 by Walter de Gruyter Berlin/Boston

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