Social Motives and Risk-Taking in Investment Decisions

A pervasive feature in the finance industry is relative performance, which can include extrinsic (money), intrinsic (self-image), and reputational (status) motives. In this paper, we model a portfolio decision with two assets investigate how motives (i.e., public announcement of winners or losers) influence risk-taking investment decisions vis-a-vis We test our hypotheses experimentally 864 students 330 financial professionals. find that play minor role among professionals, as underperformers already increased due to Student behavior, however, mainly driven by levels come close those professionals when losers are announced publicly. This indicates show higher (self-image) incentives outperform others compared non-professionals (students), but similar behavior be sparked latter adding incentives.