Multiplicative growth processes that are subject to random shocks often have a skewed distribution of outcomes. In a number of incentivized laboratory experiments we show that a large majority of participants either strongly underestimate skewness or ignore it completely. Participants misperceive the outcome distribution's spread to be far too narrow-band and they estimate the median to lie too close ...
2013| Ludwig Ensthaler, Olga Nottmeyer, Georg Weizsäcker, Christian Zankiewicz
Multiplicative growth processes that are subject to random shocks often have a skewed distribution of outcomes. A simple laboratory experiment shows that participants either strongly underestimate skewness or ignore it completely. The participants' choices reveal bounds on their subjective medians of a financial asset's price that is subject to stochastic growth. The observed bias in expectations is ...
2012| Ludwig Ensthaler, Olga Nottmeyer, Georg Weizsäcker
Multiplicative growth processes that are subject to random shocks often have an asymmetric distribution of outcomes. In a series of incentivized laboratory experiments, we show that a large majority of participants either strongly underestimatethe asymmetry or ignore it completely. Participants misperceive the spread of the outcome distribution to be too narrowband, and they estimate the median and ...
In:
Management Science
64 (2018), 4, S. 1693-1706
| Ludwig Ensthaler, Olga Nottmeyer, Georg Weizsäcker, Christian Zankiewicz