Researchers from the University of Warwick’s Institute of Applied Cognitive Science have devised a new method of obtaining a precise understanding of a consumer’s tolerance of risk. The research can be used to help match consumers with financial options that are closely keyed to the exact level of risk that investor feels comfortable with. This approach runs counter to the current culture which tends to provide conservative solutions to people’s financial services needs. If used widely, the resultant increased level of confidence and risk taking in how people make financial decisions could create a discernible and sustained boost in confidence in a number of financial markets.
This work arises from University of Warwick researchers Professor Nick Chater and Dr Neil Stewart’s development of a new theory of how people make risky decisions. They are now working with fellow Warwick researcher Henry Stott to develop the core idea of this development - that people cannot weigh up the absolute value of various outcomes, and don’t have any absolute idea how likely each outcome is. They tend, instead, to ‘sample’ outcomes and likelihoods from memory, and use these to assess the relative value of the options they are considering. This leads to new explanations for why people are risk-averse, and why they so dislike investment volatility.
The researchers will also develop models of “financial personalities” which will be independent of socio-economic classifications and which give a much better understanding of how people’s decision-making processes work. The researchers will also explore how consumers are influenced by the contexts in which they take financial decisions. This will help people to improve their financial decisions and banks to improve their services.
Peter Dunn | alfa
How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung
Demographic change depresses tax revenues
04.11.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT
Physicists of the University of Würzburg have made an astonishing discovery in a specific type of topological insulators. The effect is due to the structure of the materials used. The researchers have now published their work in the journal Science.
Topological insulators are currently the hot topic in physics according to the newspaper Neue Zürcher Zeitung. Only a few weeks ago, their importance was...
In recent years, lasers with ultrashort pulses (USP) down to the femtosecond range have become established on an industrial scale. They could advance some applications with the much-lauded “cold ablation” – if that meant they would then achieve more throughput. A new generation of process engineering that will address this issue in particular will be discussed at the “4th UKP Workshop – Ultrafast Laser Technology” in April 2017.
Even back in the 1990s, scientists were comparing materials processing with nanosecond, picosecond and femtosesecond pulses. The result was surprising:...
Have you ever wondered how you see the world? Vision is about photons of light, which are packets of energy, interacting with the atoms or molecules in what...
A multi-institutional research collaboration has created a novel approach for fabricating three-dimensional micro-optics through the shape-defined formation of porous silicon (PSi), with broad impacts in integrated optoelectronics, imaging, and photovoltaics.
Working with colleagues at Stanford and The Dow Chemical Company, researchers at the University of Illinois at Urbana-Champaign fabricated 3-D birefringent...
In experiments with magnetic atoms conducted at extremely low temperatures, scientists have demonstrated a unique phase of matter: The atoms form a new type of quantum liquid or quantum droplet state. These so called quantum droplets may preserve their form in absence of external confinement because of quantum effects. The joint team of experimental physicists from Innsbruck and theoretical physicists from Hannover report on their findings in the journal Physical Review X.
“Our Quantum droplets are in the gas phase but they still drop like a rock,” explains experimental physicist Francesca Ferlaino when talking about the...
16.11.2016 | Event News
01.11.2016 | Event News
14.10.2016 | Event News
09.12.2016 | Life Sciences
09.12.2016 | Ecology, The Environment and Conservation
09.12.2016 | Health and Medicine