Investors’ behaviour and performance in various risk environments: results of a classroom experiment

Abstract

Investor’s behaviour, his or her risk tolerance and risk aversion depending on the level of risk in investment environment and his or her emotional condition is a very interesting field of financial research. There is a vast amount of literature on decision-making in the conditions of uncertainty and risk, also how emotions affect investment decisions. Using data from an originally designed classroom experiment, investors’ behavioural patterns, their investment performance in risk-free and risky environments are studied. Also the differences between male and female investment behaviour and financial performance, and the effect of the amount of the initial endowment are considered.