Information and context matter: debiasing the disposition effect with lasting impact

The disposition effect is one of the most prominent and widely studied behavioral biases observed among investors. It describes the tendency to close out winning investments prematurely while holding on to losing ones for too long and is generally associated with reduced investment returns. Researchers have explored various debiasing strategies and interventions to mitigate the disposition effect and its detrimental impact on returns. We summarize a between-subject experiment with n = 132 UK participants testing the impact of an informational feedback-like intervention to mitigate the disposition effect, informing participants about the disposition effect. Moreover, we re-examine our intervention's impact in the follow-up measurements which are two weeks and again three months after the first measurement. We find our intervention to have a significant impact, reducing the disposition effect in the first measurement. In addition, we still find a significant impact of the intervention, reducing the disposition effect after two weeks, while no significant impact is observed at the three-month point.While we find a higher disposition effect to be associated with lower returns for one measurement, the opposite is true for the other two measurements. Moreover, the intervention had a return reducing impact for one measurement and no significant impact for the other two. Overall, our study shows a promising intervention that may be readily deployed among retail investors with a somewhat lasting impact to mitigate the disposition effect. However, our study also shows that the relationship between the disposition effect and investment returns is nuanced

Heterogeneity in risk-taking during the COVID-19 pandemic: evidence from the UK lockdown

In two pre-registered online studies during the COVID-19 pandemic and the early 2020 lockdown (one of which with a UK representative sample) we elicit risk-tolerance for 1,254 UK residents using four of the most widely applied risk-taking tasks in behavioral economics and psychology. Specifically, participants completed the incentive-compatible Balloon Analog Risk Task (BART) and the Binswanger-Eckel-Grossman (BEG) multiple lotteries task, as well as the Domain-Specific Risk-Taking Task (DOSPERT) and the self-reported questions for risk-taking used in the German Socio-economic Panel (SOEP) study. In addition, participants in the UK representative sample answered a range of questions about COVID-19-related risky behaviors selected from the UCL COVID-19 Social Survey and the ICL-YouGov survey on COVID-19 behaviors. Consistently with pre-COVID-19 times, we find that risk tolerance during the UK lockdown (i) was higher in men than in women and (ii) decreased with age. Undocumented in pre-COVID-19 times, we find some evidence for healthier participants displaying significantly higher risk-tolerance for self-reported risk measures. We find no systematic nor robust patterns of association between the COVID-19 risky behaviors and the four risk-taking tasks in our study. Moreover, we find no evidence in support of the so-called “risk compensation” hypothesis. If anything, it appears that participants who took greater risk in real-life COVID-19-relevant risky behaviors (e.g., isolating or taking precautions) also exhibited higher risk-tolerance in our experimental and self-reported risk-taking measures

Who’s more relaxed about the risk of catching COVID – and are they habitual risk-takers?

Which groups of people are more likely to take the risk of catching COVID-19? And does wearing a face covering make them more or less likely to stick to other preventative measures? Madeline Quinlan reports on a survey by Benno Guenther, Matteo M Galizzi and Jet Sanders (LSE) on risk tolerance in the COVID era

Weakened weekdays : lockdown disrupts the weekly cycle of risk tolerance

Risk tolerance decreases from Monday to Thursday and increases on Friday. Antecedents of this weekly risk cycle are difficult to investigate experimentally as manipulating the seven-day cycle is impractical. Here we used temporal disorientation during the UK COVID-19 lockdown to conduct a natural experiment. In two studies, we measured responses to risk in participants with either a strong or weak sense of weekday, after either a short or long period of disruption to their weekly routine by lockdown. In Study 1 (N = 864), the weekly risk cycle was consistent in risk attitude measures specifically to participants who reported a strong sense of weekday. In Study 2 (N = 829), the weekly risk cycle was abolished, even for participants who retained a strong sense of weekday. We propose that two factors sustain the weekly risk cycle. If the sense of weekday is lacking, then weekday will have little effect because the current day is not salient. If weekday associations decay, then weekday will have little effect because the current day is not meaningful. The weekly risk cycle is strong and consistent when (i) sense of weekday is robust and (ii) weekday associations are maintained

Upper limits on the strength of periodic gravitational waves from PSR J1939+2134

The first science run of the LIGO and GEO gravitational wave detectors presented the opportunity to test methods of searching for gravitational waves from known pulsars. Here we present new direct upper limits on the strength of waves from the pulsar PSR J1939+2134 using two independent analysis methods, one in the frequency domain using frequentist statistics and one in the time domain using Bayesian inference. Both methods show that the strain amplitude at Earth from this pulsar is less than a few times $10^{-22}$.Comment: 7 pages, 1 figure, to appear in the Proceedings of the 5th Edoardo Amaldi Conference on Gravitational Waves, Tirrenia, Pisa, Italy, 6-11 July 200

Improving the sensitivity to gravitational-wave sources by modifying the input-output optics of advanced interferometers

We study frequency dependent (FD) input-output schemes for signal-recycling interferometers, the baseline design of Advanced LIGO and the current configuration of GEO 600. Complementary to a recent proposal by Harms et al. to use FD input squeezing and ordinary homodyne detection, we explore a scheme which uses ordinary squeezed vacuum, but FD readout. Both schemes, which are sub-optimal among all possible input-output schemes, provide a global noise suppression by the power squeeze factor, while being realizable by using detuned Fabry-Perot cavities as input/output filters. At high frequencies, the two schemes are shown to be equivalent, while at low frequencies our scheme gives better performance than that of Harms et al., and is nearly fully optimal. We then study the sensitivity improvement achievable by these schemes in Advanced LIGO era (with 30-m filter cavities and current estimates of filter-mirror losses and thermal noise), for neutron star binary inspirals, and for narrowband GW sources such as low-mass X-ray binaries and known radio pulsars. Optical losses are shown to be a major obstacle for the actual implementation of these techniques in Advanced LIGO. On time scales of third-generation interferometers, like EURO/LIGO-III (~2012), with kilometer-scale filter cavities, a signal-recycling interferometer with the FD readout scheme explored in this paper can have performances comparable to existing proposals. [abridged]Comment: Figs. 9 and 12 corrected; Appendix added for narrowband data analysi

Search for gravitational wave bursts in LIGO's third science run

We report on a search for gravitational wave bursts in data from the three LIGO interferometric detectors during their third science run. The search targets subsecond bursts in the frequency range 100-1100 Hz for which no waveform model is assumed, and has a sensitivity in terms of the root-sum-square (rss) strain amplitude of hrss ~ 10^{-20} / sqrt(Hz). No gravitational wave signals were detected in the 8 days of analyzed data.Comment: 12 pages, 6 figures. Amaldi-6 conference proceedings to be published in Classical and Quantum Gravit

Quantum state preparation and macroscopic entanglement in gravitational-wave detectors

Long-baseline laser-interferometer gravitational-wave detectors are operating at a factor of 10 (in amplitude) above the standard quantum limit (SQL) within a broad frequency band. Such a low classical noise budget has already allowed the creation of a controlled 2.7 kg macroscopic oscillator with an effective eigenfrequency of 150 Hz and an occupation number of 200. This result, along with the prospect for further improvements, heralds the new possibility of experimentally probing macroscopic quantum mechanics (MQM) - quantum mechanical behavior of objects in the realm of everyday experience - using gravitational-wave detectors. In this paper, we provide the mathematical foundation for the first step of a MQM experiment: the preparation of a macroscopic test mass into a nearly minimum-Heisenberg-limited Gaussian quantum state, which is possible if the interferometer's classical noise beats the SQL in a broad frequency band. Our formalism, based on Wiener filtering, allows a straightforward conversion from the classical noise budget of a laser interferometer, in terms of noise spectra, into the strategy for quantum state preparation, and the quality of the prepared state. Using this formalism, we consider how Gaussian entanglement can be built among two macroscopic test masses, and the performance of the planned Advanced LIGO interferometers in quantum-state preparation

Searching for a Stochastic Background of Gravitational Waves with LIGO

The Laser Interferometer Gravitational-wave Observatory (LIGO) has performed the fourth science run, S4, with significantly improved interferometer sensitivities with respect to previous runs. Using data acquired during this science run, we place a limit on the amplitude of a stochastic background of gravitational waves. For a frequency independent spectrum, the new limit is $\Omega_{\rm GW} < 6.5 \times 10^{-5}$. This is currently the most sensitive result in the frequency range 51-150 Hz, with a factor of 13 improvement over the previous LIGO result. We discuss complementarity of the new result with other constraints on a stochastic background of gravitational waves, and we investigate implications of the new result for different models of this background.Comment: 37 pages, 16 figure

Risk-taking in times of crisis

The impact of crises as a source of background risk may have profound impact on risk-taking across contexts. This thesis investigates risk-taking within the context of various types of background risks and crises, with specific focus on the COVID-19 pandemic. While the first chapter serves as an introduction to the thesis, the second chapter summarises existing findings on risk-taking patterns during the COVID-19 era. It sets the foundation for the thesis by highlighting the importance of understanding risk-taking in crisis situations and introducing relevant concepts. Chapter 3 presents the outcome of two studies conducted amid the COVID-19 pandemic, wherein risk tolerance was assessed for 1,254 UK residents using four well-established risk-taking tasks. Additionally, one of the studies explored participants' responses to questions concerning real-world COVID-19-related risky behaviours. The subsequent chapter introduces a new scale, the Pandemic-DOSPERT (PDOSPERT), adapted from the original DOSPERT scale, to better predict real-world risk-taking behaviour in a pandemic context. This scale enhances our ability to gauge risk-taking in the face of the ongoing pandemic. In the next chapter fluctuations in risk-taking behaviour during the COVID-19 pandemic as a function of the day of the week are examined, shedding light on potential patterns and dynamics. The final chapter summarises the findings of a study experimentally investigating the influence of different types of background risks, such as the threat of WWIII, another pandemic, AI-related risks, cost of living crisis, and climate crises, on foreground risk-taking. Overall, the research reveals several noteworthy insights. Firstly, during the UK lockdown, risk tolerance was found to be higher in men than in women and decreased with age. No substantial evidence supports the "risk compensation" hypothesis, and there appear to be no consistent patterns of association between COVID-19 risky behaviours and four standard risk-taking measures. Secondly, the new PDOSPERT scale emerges as a significant improvement over the original DOSPERT in predicting pandemic-related risk-taking behaviour, especially the health and safety subscale which demonstrates strong association with pandemic-related risk behaviours. Finally, compared to a control condition with no background risk, there is evidence for significantly reduced risk tolerance as measured by the PDOSPERT and the SOEP under a pandemic situation as well as for a number of DOSPERT and PDOSPERT subscales across conditions, with varying directions