Home- Market- Bias! Investment behavior from the perspective of behavioral economics in the Germany stock market

Pitterle, Claudia (2022): Home- Market- Bias! Investment behavior from the perspective of behavioral economics in the Germany stock market. Published in: cross cultural managment journal , Vol. XXIV, No. 1 and 2 (2022)

Abstract

Studies of the investor culture of both private and institutional German investors show a clear overweighting of German equity portfolios compared with international equity portfolios. This overweighting does not stop at institutional investors. It reduces returns and leads to increased risks in the long run. Explanations for this lie in heuristics and distorted perceptions, also called home bias and overconfidence effect, which lead to this investor behavior. This article describes these phenomena from the perspective of behavioral economics using heuristics.

• Item Type: MPRA Paper
• Language: English
• Keywords: German Stock Market; Private and Institutional Investment Portfolios; Home- Bias; Heuristics; Behavioral Economics; Behavioral Finance
• Subjects: D - Microeconomics > D9 - Intertemporal Choice > D91 - Intertemporal Household Choice ; Life Cycle Models and Saving; G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency ; Event Studies ; Insider Trading; G - Financial Economics > G1 - General Financial Markets > G17 - Financial Forecasting and Simulation

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