Is there a pessimistic bias in individual beliefs ? Evidence from survey dat

Selima Benmansour (1) , Elyès Jouini (2) , Clotilde Napp (1, 3)

1 DRM - Dauphine Recherches en Management
2 CEREMADE - CEntre de REcherches en MAthématiques de la DEcision
3 CREST - Centre de Recherche en Économie et Statistique

The aim of this paper is to determine whether individuals exhibit a behavioral bias towards pessimism in their beliefs, in a lottery or more generally in an investment opportunities framework. For this purpose, we design a field survey on
a sample of 1,540 individuals aiming at deriving a measure of pessimism from answers to hypothetical scenarios. In the context of our experiment, we observe that individuals are on average pessimistic. We analyze how pessimism is distributed among individuals, in particular in link with gender, age and income. We also analyze how our notion of pessimism is related to more general notions of pessimism
already introduced in psychology. We finally estimate the possible impact of this pessimistic bias on the financial markets equilibrium risk premium

Mots clés: pessimism; judged probability; lottery

Domaines: Economies et finances; Psychologie; Méthodes et statistiques; Etudes sur le genre

Selima Benmansour, Elyès Jouini, Clotilde Napp. Is there a pessimistic bias in individual beliefs ? Evidence from survey dat. European Financial Management Symposium, 2006, Durham, United Kingdom. ⟨halshs-00163694⟩