Background: The 12th of March 2020 the Stockholm stock market fell close to eleven percent, the biggest decline on the market in modern time, as a result of the Covid-19 virus. Earlier studies have found that many individual investors make ill-considered decisions during sharp price falls which don't benefit their economic interest and that every new financial crisis offers new possibilities to expand the understanding about what underlying factors that are behind the crisis. Studies about psychological shortcomings have earlier been conducted, but not in connection with a stock market crash as a result of a pandemic, which means that there is not much research within the area. Therefore, there is an incentive to investigate which psychological biases individual investors were affected by during the corona crisis. Purpose: The purpose of this thesis is to study how a number of Swedish individual investors acted on the stock market during the corona crisis and if it varies depending on how much capital they manage. Which of the psychological biases herd behaviour, the disposition effect, loss aversion and extrapolation bias the individual investors that were interviewed was affected by and how they reasoned during the sharp stock market decline in March 2020. Method: The thesis has been conducted by a qualitative method to fulfil its purpose. The data collection consists of 10 semi-structured interviews with Swedish individual investors and statistics from the stockbroker Avanza. An abductive approach has been adopted to be able to analyse the studied subject and reach a conclusion. Conclusion: The thesis finds that the actions of the investigated individual investors can be divided into three categories. The ones that sold all their stocks when the stock market declined rapidly, the ones that didn’t do anything and the ones that bought more stocks successively. There is no clear connection between managing more money and getting less affected by psychological biases. Furthermore, the respondents were partly affected by how much earlier experience they had, whereas the ones with less experience were to a greater extent affected by psychological biases.

In my dissertation, I investigate the relationship between household consumption expenditures and transitory income shocks. In the first two essays, I pay particular attention to household expenditures in the aftermath of natural disasters, which are becoming more frequent and costly in the U.S. since 1980. Additionally, I study specialty farm producers' risk attitudes after an income shock due to natural disasters. Although the permanent income hypothesis predicts that households smooth consumption over their lifetimes, credit-constrained households may find consumption smoothing impractical. This dissertation brings forth evidence regarding heterogeneity in the effect of income shocks on household expenditures. First, I find that floods and hurricanes affect food-at-home (FAH) spending in different ways. The average 15-day decrease in FAH spending is about $2 in the 90 days after a flood and about $7 in the 30 days after a hurricane. In other words, floods have a prolonged effect and hurricanes have an immediate effect. I find that floods and hurricanes remain a threat to the FAH expenditures of vulnerable households, for instance, low-income households and households in coastal states. Second, Indiana specialty farm households reduce their monthly expenses of food and miscellaneous categories by about $119 and $280, respectively, after an income loss of 20%-32%. I also find that Indiana specialty producers are less willing to take financial risk after an income loss experience, i.e., they have a decreasing absolute risk aversion. Finally, in the third essay, I show that Australian households exhibit loss aversion in consumption expenditures which also means that they behave asymmetrically in their consumption response to income shocks. However, it is only working-age younger households that show asymmetric consumption behavior as opposed to the symmetric behavior of retirement-age households. The main message of these various findings is clear: after an income shock, the magnitude of change in consumption expenditures and the saliency of certain expenditure categories for adjustment are context- and population-dependent. Hence, income support policies and post-disaster relief programs may benefit from a better understanding of the consumption behavior of beneficiary population, to achieve maximum impact through better targeting.

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Background: Neurodevelopmental and alcohol-induced changes in decision-making have been proposed to critically influence impulsive behaviour in adolescents. Objective: This study tested the influence of acute alcohol administration on impulsive choice in adolescents. Methods: Fifty-four males aged 18–19 years were tested in a single-blind placebo-controlled cross-over design. During alcohol administration (infusion resulting in an arterial blood alcohol concentration of 80 mg%) and placebo condition (saline infusion), participants performed a task battery providing estimates of delay discounting, probability discounting for gains, for losses and loss aversion, and also rated subjectively experienced alcohol effects. Additionally, baseline alcohol consumption (Alcohol Use Disorders Identification Test, blood phosphatidylethanol levels), motives (Drinking Motive Questionnaire, Alcohol Expectancy Questionnaire and Obsessive Compulsive Drinking Scale), family history and self-report measures of impulsivity (Barratt Impulsiveness Scale, Substance Use Risk Profile Scale) were provided. Results: No overall effects of treatment on choice behaviour were found. However, individual differences were observed. In the alcohol condition, more impulsive choice tendencies for delay discounting were associated with higher subjectively experienced alcohol effects. Further, higher risk aversion for probabilistic gains and higher loss aversion during alcohol condition were related to higher levels of real-life alcohol consumption and a family history of alcohol problems, respectively. Finally, the time to make a decision was substantially shortened for choices involving negative prospects. Conclusions: Contrary to common beliefs, acute alcohol intoxication did not generally incite impulsive decision-making. It rather appears that alcoholinduced behavioural changes in adolescents vary considerably depending on prior experiences and subjective effects of alcohol.

The purpose of this research is to determine if loss aversion is replicable as an overt behavioral response to potential gains and losses in complex, recurring, uncertain, and risky choice with real gains and losses of money and food. Cognitive methods used to determine the effect of loss have primarily measured verbal response to hypothetical choice scenarios in which participants cognitively predict their behavior in a series of bets or situations involving imagined monetary gains and losses. Less has been done using behavioral methods that measure overt behavioral response to gains and losses of actual commodities. The present study uses the experimental analysis of behavior to measure the asymmetrical effect of loss in multiple choice domains. A series of four experiments investigated four factors likely to affect the expression and degree of loss aversion: (a) learning and experience with consequences of choice; (b) real gains and losses instead of hypothetical quantities or imagined commodities; (c) gains and losses of a non-quantitative, primary reinforcer (food); and (d) the menstrual cycle. Participants played one of two computer games in which they earned or lost coins or food tokens exchanged for real food. Participants (N = 27, 15 women) played several 18-minute sessions in gains-only conditions and 16 sessions in 36-minute gains+punishment conditions. Recurring, complex, uncertain, and risky choice was simulated in the games by using 6-ply interdependent concurrent variable interval schedules of reinforcement (gains) and punishment (losses). Choice behavior with real gains and losses of money and food was modeled using the generalized matching law, allowing for the quantification of the effects of potential loss, relative to gains, as a change in bias and sensitivity. Loss aversion was operationalized as gain-loss asymmetry ratios derived from bias estimates produced in unpunished and punished choice conditions. Gain-loss asymmetry was replicated in both women and men in complex, recurring, uncertain, and risky choice with potential gains and losses of real money and food. Average gain-loss asymmetry ratios were 3 to 6 times greater in choice with money and 4 to 16 times greater in choice with food than those reported in the cognitive and behavioral literature. Although individual differences in response to loss were striking, the asymmetrically larger behavioral effects of loss, relative to gains, were nearly ubiquitous. Marked disruption in sensitivity to reinforcement was observed in punished choice for most participants, but for 33% of participants in choice with money and 42% in choice with food, sensitivity to reinforcers increased. No evidence was found for behavioral choice varying with the menstrual cycle.

Les gérants de portefeuille pour compte de tiers sont souvent jugés par leur performance relative à celle d'un portefeuille benchmark. A ce titre, ils sont amenés très fréquemment à utiliser des modèles internes de "risk management" pour contrôler le risque de sous-performer le benchmark. Par ailleurs, ils sont de plus en plus nombreux à adopter une politique de rémunération incitative, en percevant une commission de sur-performance par rapport au benchmark. En effet, cette composante variable de leur rémunération leur permet d'augmenter leur revenu en cas de sur-performance sans contrepartie en cas de sous-performance. Or de telles pratiques ont fait récemment l'objet de nombreuses polémiques : la période récente de crise financière mondiale a fait apparaître certaines carences de plusieurs acteurs financiers en terme de contrôle de risque ainsi que des niveaux de prise de risque et de rémunération jugés excessifs. Cependant, l'étude des implications de ces pratiques reste un thème encore relativement peu exploré dans le cadre de la théorie classique des choix dynamiques de portefeuille en temps continu. Cette thèse analyse, dans ce cadre théorique, les implications de ces pratiques de "benchmarking" sur le comportement d'investissement de l'asset manager. La première partie étudie les propriétés de la stratégie dynamique optimale pour l'asset manager concerné par l'écart entre la rentabilité de son portefeuille et celle d'un benchmark fixe ou stochastique (sur ou sous-performance). Nous considérons plusieurs types d'asset managers, caractérisés par différentes fonctions d'utilité et qui sont soumis à différentes contraintes de risque de sous-performance. Nous montrons en particulier quel est le lien entre les problèmes d'investissement avec prise en compte de l'aversion à la sous-performance et avec contrainte explicite de "risk management". Dans la seconde partie, on s'intéresse à l'asset manager bénéficiant d'une rémunération incitative (frais de gestion variables, bonus de sur-performance ou commission sur encours additionnelle). On étudie, selon la forme de ses incitations financières et son degré d'aversion à la sous-performance, comment sa stratégie d'investissement s'écarte de celle de l'investisseur (ou celle de l'asset manager sans rémunération incitative). Nous montrons que le changement de comportement de l'asset manager peut se traduire soit par une réduction du risque pris par rapport à la stratégie sans incitation financière soit au contraire par une augmentation de celui-ci. Finalement, nous montrons en quoi la présence de contraintes de risque de sous-performance, imposées au gérant ou traduisant son aversion à la sous-performance, peut être bénéfique à l'investisseur donnant mandat de gestion financière. / It is common practice to judge third-party asset managers by looking at their financial performance relative to a benchmark portfolio. For this reason, they often choose to rely on internal risk-management models to control the downside risk of their portfolio relative to the benchmark. Moreover, an increasing number are adopting an incentive-based scheme, by charging an over-performance commission relative to the benchmark. Indeed, including this variable component in their global remuneration allows them to increase their revenue in case of over-performance without any penalty in the event of underperforming the benchmark. However, such practices have recently been at the heart of several polemics: the recent global financial crisis has uncovered some shortcomings in terms of internal risk control as well as excessive risk-taking and compensation levels of several financial players. Nevertheless, it appears that analyzing the impact of these practices remains a relatively new issue in continuous time-dynamic asset allocation theory. This thesis analyses in this theoretical framework the implications of these "benchmarking" practices on the asset manager's investment behavior. The first part examines the properties of the optimal dynamic strategy for the asset manager who is concerned by the difference of return between their portfolio and a fix or stochastic benchmark (over- or under-performance). Several asset manager types are considered, defined by different utility functions and different downside-risk constraints. In particular, the link between investment problems with aversion to under-performance and risk management constraints is shown. In the second part, the case of the asset manager who benefits from an incentive compensation scheme (variable asset management fees, over-performance bonuses or additional commission on asset under management), is investigated. We study how, depending on the choice of financial inventive structure and loss aversion level, the asset manager's strategy differs from that of the investor (or the strategy of the asset manager receiving no incentive remuneration). This study shows that the change in investment behavior of the asset manager can lead to both a reduction in the risk taken relative to the strategy without financial incentives or conversely an increase thereof. Finally we show that the existence of downside risk constraints, imposed on the asset manager or corresponding to their aversion for under-performance, can be beneficial to the investor mandating financial management.

Although Andrew Marvell wrote and published relatively little, his poetry collects from the full range of “schools” and idiosyncratic styles present in the seventeenth century: echoes of Herbert, Donne, Milton, Traherne, Herrick, Lovelace, and Jonson, among others, permeate throughout his work. Although much of his imagery seems novel, if not strange, it is clear that Marvell has a deep engagement with several important long-running traditions. His work is conversation with Ovid, Horace, and Theocritus as much as it responds directly to the poets whose lives overlapped with his own. In his engagement with such varied sources, Marvell demonstrates an astounding degree of poetic flexibility. He is a master of imitating voice and style.

Although Andrew Marvell wrote and published relatively little, his poetry collects from the full range of “schools” and idiosyncratic styles present in the seventeenth century: echoes of Herbert, Donne, Milton, Traherne, Herrick, Lovelace, and Jonson, among others, permeate throughout his work. Although much of his imagery seems novel, if not strange, it is clear that Marvell has a deep engagement with several important long-running traditions. His work is conversation with Ovid, Horace, and Theocritus as much as it responds directly to the poets whose lives overlapped with his own. In his engagement with such varied sources, Marvell demonstrates an astounding degree of poetic flexibility. He is a master of imitating voice and style.

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Made available in DSpace on 2010-04-20T21:00:18Z (GMT). No. of bitstreams: 3 martincasalsturma2003.pdf.jpg: 11517 bytes, checksum: 930c75c74ff8269d877983110854646d (MD5) martincasalsturma2003.pdf: 975293 bytes, checksum: f41cfd3a5f3e659d07e2861acf4e23d4 (MD5) martincasalsturma2003.pdf.txt: 107784 bytes, checksum: e96ad0fb809a12f13ba7d3f08e24c1ee (MD5) Previous issue date: 2006-02-15T00:00:00Z / O objetivo deste trabalho é analisar a alocação de investimentos no mercado acionário brasileiro, utilizando a teoria do prospecto de Tversky e Kahneman (1979) e o conceito de Aversão a Perdas Míope (Myopic Loss Aversion) proposto por Benartzi e Thaler (1995). Foram levantados através de experimento de laboratório os parâmetros da função de valor e da função de ponderação de probabilidades da teoria do prospecto e foi verificada a alocação de investimentos entre ações e renda fixa que maximizam a utilidade. Chegamos à conclusão que o total de recursos atualmente direcionados ao mercado de ações no Brasil, que é de aproximadamente 2,7% para pessoas físicas e de 6,0% para pessoas jurídicas, é compatível com a teoria do prospecto. / The objective of this study is to analyze the investment allocation in the Brazilian stock market, using Tversky and Kahneman’s prospect theory (1979) and the concept of myopic loss aversion proposed by Benartzi and Thaler (1995). We run a laboratory experiment to obtain the parameters of the value function and the probability weighting function of the prospect theory and identify the allocation that maximizes utility in the Brazilian Market We conclude that the actual allocation of investment in the stock market, of around 2.7% for individuals and around 6% for all the segments, is in accordance with the prospect theory.