Cognitive abilities and behavioral biases

• Titel: Cognitive abilities and behavioral biases
• Mitwirkende: Oechssler, Joerg
• Mitwirkende: Roider, Andreas
• Mitwirkende: Schmitz, Patrick W.
• Verf.angabe: Jörg Oechssler ; Andreas Roider ; Patrick W. Schmitz
• Verlagsort: Mannheim
• Verlagsort: Heidelberg
• Verlagsort: Heidelberg
• Verlag: Univ. Mannheim, Sonderforschungsbereich 504
• Verlag: Universitätsbibliothek der Universität Heidelberg
• Verlag: University of Heidelberg, Department of Economics
• E-Jahr: 2008
• Jahr: May 19, 2008
• Jahr: May 19, 2008
• Jahr: May 19, 2008
• Umfang: 1 Online-Ressource
• Gesamttitel/Reihe: Discussion paper series / Universität Heidelberg, Department of Economics ; no. 465
• Gesamttitel/Reihe: Discussion Paper Series / Universität <Heidelberg> / Department of Economics ; 465
• ComputerInfo: Systemvoraussetzungen: Acrobat Reader.
• URN: urn:nbn:de:bsz:180-madoc-20738
• URN: urn:nbn:de:bsz:16-opus-94635
• Schlagwörter: (s)Befangenheit / (s)Kognitive Kompetenz / (s)Investitionsentscheidung
• Datenträger: Online-Ressource
• Sprache: eng
• Bibliogr. Hinweis: Erscheint auch als : Druck-Ausgabe: Oechssler, Joerg: Cognitive abilities and behavioral biases. - Mannheim : Univ. Mannheim, Sonderforschungsbereich 504, 2008. - 12 Bl.
• Sach-SW: Cognitive Reflection Test
• Sach-SW: behavioral finance
• Sach-SW: biases
• Sach-SW: cognitive abilities
• Sach-SW: cognitive refl‡ection test
• Form-SW: Arbeitspapier
• Form-SW: Graue Literatur
• K10plus-PPN: 576916218
• K10plus-PPN:
  Universitätsbibliothek
• Lokale URL UB: Zum Volltext

Abstract

We use a simple, three-item test for cognitive abilities to investigate whether established behavioral biases that play a prominent role in behavioral economics and finance are related to cognitive abilities. We find that higher test scores on the Cognitive Reflection Test of Frederick (2005) indeed are correlated with lower incidences of the conjunction fallacy, conservatism in updating probabil-ities, and overconfidence. Test scores are also significantly related to subjects' time and risk preferences. We find no influence on anchoring. However, even if biases are lower for people with higher cognitive abilities, they still remain substantial.