Are investors who receive seemingly certain forecasts less loyal to their investment firm and investment product?
- Resource Type
- Authors
- Batteux, Eleonore
- Source
- Subject
- Behavioral Economics
FOS: Psychology
Economics
Psychology
Social and Behavioral Sciences
- Language
Our current society is riddled with particularly high levels of uncertainty. Despite this, there seems to be a consensus that giving a precise forecast which is unlikely to occur is preferable to admitting that a precise prediction is not possible under uncertainty (Manski, 2011). We seek to address the effects of masking uncertainty in the context of investment decisions made by novice investors. We test the hypothesis that investors who are given uncertain forecasts are more accepting of uncertainty when it manifests itself, as opposed to investors who are given forecasts with an allure of certainty.