Three essays in investor behavior
MetadataShow full item record
This dissertation examines the impact of certain household characteristics on financial decision making. Financial sophistication affects investor decision. The first essay studies the definition of accredited investors and whether it is a good proxy of financial sophistication among older investors. Habit hinders individuals from updating their decisions when their situation changes. The second essay investigates whether the habit of thrift affects retirement spending. While habits can be changed, instincts are often hard to break. The third essay develops a new instrument to measure self-control or impulsivity and studies how these instincts affect financial outcomes, and whether forced saving vehicles could serve as a behavioral remedy. The findings from this dissertation provide insights into how individuals’ habits and self-control adversely affect their financial decision making. The results also help financial advisers better serve their clients in achieving their financial goals, and can inform policy to better account for limitations in investor decision making. The findings from the first essay in particular provide insight into the criteria the SEC should use to identify accredited investors.