Experimental Design: Testing the Zero Yield Bias

D 2019

Experimental Design: Testing the Zero Yield Bias

SCHAAB, Ilja, Eric FRÉRE and Alexander ZURECK

Basic information

Original name

Experimental Design: Testing the Zero Yield Bias

Authors

SCHAAB, Ilja (276 Germany, guarantor, belonging to the institution), Eric FRÉRE (276 Germany) and Alexander ZURECK (276 Germany, belonging to the institution)

Edition

Brno, Czech Republic, European Financial Systems 2019 - Proceedings of the 16th International Scientific Conference, p. 480-487, 8 pp. 2019

Publisher

Masaryk University Press

Other information

Language

English

Type of outcome

Stať ve sborníku

Field of Study

50206 Finance

Country of publisher

Czech Republic

Confidentiality degree

není předmětem státního či obchodního tajemství

Publication form

electronic version available online

References:

URL

RIV identification code

RIV/00216224:14560/19:00110871

Organization unit

Faculty of Economics and Administration

ISBN

978-80-210-9338-6

UT WoS

000503222600056

Keywords in English

Behavioral Finance; Portfolio Theory; Reaching for Yield; Unstable Risk Preferences; Zero Interest Rate Environment

Abstract

V originále

The various impacts of the European Central Bank’s monetary policy induce a necessity for new research approaches as the established theories provide only limited explanations to the new cause and effect relationships. First empirical studies on the topic of an investor’s risk stability in a low interest rate environment provided valuable insights for the portfolio theory and behavioral finance. According to the results, investors tend to allocate more funds into riskier assets when the interest rates are low. This paper proposes an experimental design which extends the differentiation between only a risk-free and a risky asset to a close-to-reality set-up. By presenting unlabeled asset classes with their key characteristics in different interest rate environments, the test subject gets the opportunity for a multidimensional assessment of the situation. The development of the six investment opportunities as well as their characteristics is explained in detail to provide transparency about the realistic set-up. The research based on this experimental design should provide deeper insights about the interrelation of the three dimensions of the triangle of finance and investing.

Citovat

SCHAAB, Ilja, Eric FRÉRE and Alexander ZURECK. Experimental Design: Testing the Zero Yield Bias. Online. In Josef Nešleha, Lukáš Marek, Miroslav Svoboda, Zuzana Rakovská (eds.). European Financial Systems 2019 - Proceedings of the 16th International Scientific Conference. Brno, Czech Republic: Masaryk University Press, 2019, p. 480-487. ISBN 978-80-210-9338-6.

@inproceedings{1565837,
   author = {Schaab, Ilja and Frére, Eric and Zureck, Alexander},
   address = {Brno, Czech Republic},
   booktitle = {European Financial Systems 2019 - Proceedings of the 16th International Scientific Conference},
   editor = {Josef Nešleha, Lukáš Marek, Miroslav Svoboda, Zuzana Rakovská (eds.)},
   keywords = {Behavioral Finance; Portfolio Theory; Reaching for Yield; Unstable Risk Preferences; Zero Interest Rate Environment},
   howpublished = {elektronická verze "online"},
   language = {eng},
   location = {Brno, Czech Republic},
   isbn = {978-80-210-9338-6},
   pages = {480-487},
   publisher = {Masaryk University Press},
   title = {Experimental Design: Testing the Zero Yield Bias},
   url = {https://is.muni.cz/do/econ/sborniky/2019/Proceedings_final.pdf},
   year = {2019}
}

TY  - JOUR
ID  - 1565837
AU  - Schaab, Ilja - Frére, Eric - Zureck, Alexander
PY  - 2019
TI  - Experimental Design: Testing the Zero Yield Bias
PB  - Masaryk University Press
CY  - Brno, Czech Republic
SN  - 9788021093386
KW  - Behavioral Finance
KW  - Portfolio Theory
KW  - Reaching for Yield
KW  - Unstable Risk Preferences
KW  - Zero Interest Rate Environment
UR  - https://is.muni.cz/do/econ/sborniky/2019/Proceedings_final.pdf
L2  - https://is.muni.cz/do/econ/sborniky/2019/Proceedings_final.pdf
N2  - The various impacts of the European Central Bank’s monetary policy induce a necessity for new research approaches as the established theories provide only limited explanations to the new cause and effect relationships. First empirical studies on the topic of an investor’s risk stability in a low interest rate environment provided valuable insights for the portfolio theory and behavioral finance. According to the results, investors tend to allocate more funds into riskier assets when the interest rates are low. This paper proposes an experimental design which extends the differentiation between only a risk-free and a risky asset to a close-to-reality set-up. By presenting unlabeled asset classes with their key characteristics in different interest rate environments, the test subject gets the opportunity for a multidimensional assessment of the situation. The development of the six investment opportunities as well as their characteristics is explained in detail to provide transparency about the realistic set-up. The research based on this experimental design should provide deeper insights about the interrelation of the three dimensions of the triangle of finance and investing.
ER  -

SCHAAB, Ilja, Eric FRÉRE and Alexander ZURECK. Experimental Design: Testing the Zero Yield Bias. Online. In Josef Nešleha, Lukáš Marek, Miroslav Svoboda, Zuzana Rakovská (eds.). \textit{European Financial Systems 2019 - Proceedings of the 16th International Scientific Conference}. Brno, Czech Republic: Masaryk University Press, 2019, p.~480-487. ISBN~978-80-210-9338-6.

Detailed Information on Publication Record