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The purpose of this paper is to investigate how social comparison and motivation to compete account for elevated risk-taking in fund management corroborated by asset market experiments when performance depends on rank-based incentives.

In two laboratory experiments, university students (n1 = 240/n2 = 120) make choices between risky and certain outcomes of hypothetical sums of money. Both experiments investigate in which direction risky choices in an individual condition (individual risk preference) are shifted when participants compare their performance to another participant's performance (social comparison), being instructed or not to outperform the other (incentive to compete).

In the absence of incentives to compete, participants tend to minimize the differences between expected outcomes to themselves and to the other, but when provided with incentives to compete, they tend to maximize these differences. An independent additional increase in risk-taking is observed when participants are provided with incentives to compete.

Original findings include that social comparison does not evoke motivation to compete unless incentives are offered and that increases in risk-taking depend both on what the other chooses and the incentives.

The purpose of this paper is to present an affect account that identifies emotions driving sell preferences in stock markets that result in the disposition effect (winning stocks hold too short and losing stocks too long) and to specify how stock prices are influenced.

The affect account is derived based on analyses of previous research showing the disposition effect, proposed explanations of the effect, and basic emotion research. An individual-level analysis is performed of the consequences for stock market prices.

The main proposal is that investors prefer to sell when price increases make the increasing balance of hope and fear equal to a faster increasingly balance of anticipated elation and disappointment, and when price decreases make the faster increasingly negative hope-fear balance equal to the increasing negative elation-disappointment balance. Steepness in slope of the negative hope-fear balance accounts for whether a loser is never sold (an extreme disposition effect), sold later than a winning stock (the usually observed disposition effect), or sold earlier than a winning stock (a reverse disposition effect). The individual-level analysis suggests that the affect-driven disposition effect would intensify or attenuate trends in stock prices depending on the demand-supply balance.

A conceptual contribution to research of emotion influences on stock trading and specifically to explanations of the disposition effect on sell decisions by less sophisticated and experienced investors.

This paper aims to investigate whether loan officers' risk taking in credit decisions are associated with their personal financial risk preference and personality traits or solely with bank-contextual and loan-relevant factors.

An online survey administered in six large Swedish banks to 163 loan officers responsible for assessing credit risk and approval of loan applications. The loan officers rated their likelihood of approving fictitious loan applications from business companies.

The loan officers' credit risk taking is associated with bank-contextual factors, directly with perceived organizational credit risk norms and indirectly with self-confidence in assessing credit risks through attitude to credit risk taking. A direct association is also found with personal financial risk preference but not with personality traits.

Increased awareness of that loan officers' personal financial risk preference is associated with their credit risk taking in loan decisions but that the banks' risk policy has a stronger association. Banks' managements and boards should therefore assure that their credit risk policy is implemented, followed and being aligned with their performance incentives.

Increased awareness of that loan officers' credit risk taking is associated with personal financial risk preference but more strongly with the banks' risk policy that motivate banks' managements and boards to assure that their credit risk policy is implemented, followed and being aligned with their performance incentives.

The first study which directly compare the associations of loan officers' risk taking in credit approvals with personal risk preference and personality traits versus bank-contextual factors and loan-relevant information.

The purpose of this paper is to review behavioral explanations of the empirical observation that investment managers in mutual fund companies increase their risk taking when offered incentives based on how their performance is ranked compared to peers.

A conceptual model is proposed of how research on social comparison, competition and financial risk taking may explain increased investor risk taking induced by rank-based incentives. Research findings in each of the strands of research are reviewed.

A proposed main explanation is that an above-average bias in comparing oneself with competitors results in overconfidence that increases risk taking. A complementary proposed explanation is that an anticipated loss when lagging behind increases risk taking, and another proposed complementary explanation the belief that risk taking is a winning strategy.

The results provide a broad framework for directions of research on social comparison processes in the mutual fund industry addressing the difficulties in implementing performance evaluations.

The purpose of this paper is to investigate whether stock price predictions and investment decisions improve by exposure to increasing price series.

The authors conducted three laboratory experiments in which undergraduates were asked to role‐play being investors buying and selling stock shares. Their task was to predict an unknown closing price from an opening price and to choose the number of stocks to purchase to the opening price (risk aversion) or the closing price (risk taking). In Experiment 1 stock prices differed in volatility for increasing, decreasing or no price trend. Prices were in different conditions provided numerically for 15 trading days, for the last 10 trading days, or for the last five trading days. In Experiment 2 the price series were also visually displayed as scatter plots. In Experiment 3 the stock prices were presented for the preceding 15 days, only for each third day (five days) of the preceding 15 days, or as five prices, each aggregated for three consecutive days of the preceding 15 days. Only numerical price information was provided.

The results of Experiments 1 and 2 showed that predictions were not markedly worse for shorter than longer price series. Possibly because longer price series increase information processing load, visual information had some influence to reduce prediction errors for the longer price series. The results of Experiment 3 showed that accuracy of predictions increased for less price volatility due to aggregation, whereas again there was no difference between five and 15 trading days. Purchase decisions resulted in better outcomes for the aggregated prices.

Investorś performance in stock markets may not improve by increasing the length of evaluation intervals unless the quality of the information is also increased. The results need to be verified in actual stock markets.

The results have bearings on the design of bonus systems.

The paper shows how stock price predictions and buying and selling decisions depend on amount and quality of information about historical prices.

The purpose of this paper is to investigate how trust in the sender of financial information and a narrative vs fact-related format of the information influence intentions to save in a mutual fund.

In Experiment 1, 186 undergraduates participate and in Experiment 2, 434 Swedish citizens between 18 and 70 years randomly chosen from a consumer panel. In both experiments participants are randomized to two conditions in which they are presented with the same information about a mutual fund in a narrative or a traditional fact-related format. In four different between-groups conditions crossed with information format, pre-tested descriptions of different fictitious banks are presented. The descriptions are combined in a fractional factorial design such that one bank is low in the three trust determinants of competence, benevolence and transparency, whereas the other three banks are high in one of the trust determinants but lower in the others. Ratings are made of the information with respect to how much positive affect the information evokes, interest in the message and intention to save in the mutual fund.

In both experiments the narrative compared to the fact-based information format increases positive affect, interest and intention to save. Trust in the bank has an independent effect of increasing the intention to save.

The narrative format of financial information may be key to increase involvement in financial choices but needs to be supplemented by a message that reinforces the positive affect and interest evoked by the format.

A demonstration of how a narrative format of financial information and trust in the sender jointly influence intentions to save in a mutual fund.

The purpose of this paper is to investigate whether a narrative compared to a traditional fact-related format of financial information elicits more involved processing of such information by consumers and therefore more informed choices of retirement savings.

A total of 394 undergraduates were recruited to three experiments. In Experiments 1 and 2 participants presented with information about a mutual fund were randomly assigned to one of four conditions (narrative format vs fact-related format crossed with optimistic vs pessimistic financial forecast). In both experiments dependent variables were positive affect, emotive response and purchase intention, and in Experiment 2 also scepticism about the information. Involvement and financial knowledge were furthermore measured in Experiment 2. In Experiment 3 information was presented about a savings account. Participants were randomly assigned to either a condition with a narrative or a fact-related information format. The dependent variables were the same as in Experiment 2.

The research finds support for that information about a financial message in a narrative format results in stronger positive affect, emotive response and purchase intention. No effect of scepticism toward the message is observed. Involvement and financial knowledge tend to interact with format. Mediation analyses support that positive affect induced by the narrative format impacts on emotive response which jointly with positive affect impacts on purchase intention.

The research suggests that a narrative message format may be used in marketing financial products to increase passive consumerś involvement.

The first demonstration of that a narrative format has an effect on processing of financial information.

The purpose of this paper is to develop a comprehensive set of grocery store attributes that can be standardized and used in empirical research aiming at increasing retailers’ understanding of determinants of grocery store choice, and assessing how the relative importance of the attributes is affected by consumer socio-demographic characteristics and shopping behaviour.

An internet survey of 1,575 Swedish consumers was conducted. A large set of attributes was rated by the participants on seven-point scales with respect to their importance for choice of grocery store. Principal component analysis (PCA) resulted in a reduced set of reliably measured aggregated attributes. This set included the attractiveness attributes price level, supply range, supply quality, service quality, storescape quality, facilities for childcare, and closeness to other stores, and the accessibility attributes easy access by car, easy access by other travel modes, and availability (closeness to store and opening hours).

The results showed that accessibility by car is the most important grocery store attribute, storescape quality and availability the next most important and facilities for childcare the least important. It was also found that socio-demographic factors and shopping behaviour have an impact on the importance of the store attributes.

A comprehensive set of attractiveness and accessibility attributes of grocery stores that can be standardized and used in empirical research is established. The results are valid for the Swedish-European conditions that differ from the conditions in North America where most previous research has been conducted. The results reveal the relative importance grocery-shopping consumers place on controllable attractiveness attributes compared to uncontrollable accessibility attributes as well as the relative importance of the attributes within each category.

In recent years, librarians, as a profession, have attempted to identify individual users' needs. Librarians in the past have served their communities with people, rather than the storage of books and materials, as their top priority; however, in library and information science literature, user‐centered theory is new. It offers a psychological/sociological depth that the practical literature, as late as 1990, fails to touch.

The purpose of this paper is to introduce the special issue of Review of Behavioural Finance entitled “Behavioural finance: the role of psychological factors in financial decisions”.

The authors present a brief outline of the origins of behavioural economics; discuss the role that experimental and survey methods play in the study of financial behaviour; summarise the contributions made by the papers in the issue and consider their implications; and assess why research in behavioural finance is important for finance researchers and practitioners.

The primary input to behavioural finance has been from experimental psychology. Methods developed within sociology such as surveys, interviews, participant observation, focus groups have not had the same degree of influence. Typically, these methods are even more expensive than experimental ones and so costs of using them may be one reason for their lack of impact. However, it is also possible that the training of finance academics leads them to prefer methodologies that permit greater control and a clearer causal interpretation.

The paper shows that interdisciplinary research is becoming more widespread and it is likely that greater collaboration between finance and sociology will develop in the future.