The Standard Portfolio Choice Problem in Germany


Breunig, Christoph (HU Berlin)
Huck, Steffen (WZB Berlin and UCL)
Schmidt, Tobias (QuantCo)
Weizsäcker, Georg (HU Berlin and DIW Berlin)


We study an investment experiment with a representative sample of German households. Respondents invest in a safe asset and a risky asset whose return is tied to the German stock market. Experimental investments correlate with beliefs about stock market returns and exhibit desirable external validity at least in one respect: they predict real-life stock market participation. But many households are unresponsive to an exogenous increase in the risky asset’s return. The data analysis and a series of additional laboratory experiments suggest that task complexity decreases the responsiveness to incentives. Modifying the safe asset’s return has a larger effect on behaviour than modifying the risky asset’s return.


stock market expectations; stock market participation; portfolio choice; financial literacy; complexity


D01; D14; D84; G11


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The Standard Portfolio Choice Problem in Germany
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