AN EXPERIMENT ON RISK-TAKING AND EVALUATION PERIODS

Does the period over which individuals evaluate outcomes influence the ir investment in risky assets? Results from this study show that the m ore frequently returns are evaluated, the more risk averse investors w ill be. The results are in line with the behavioral hypothesis of ''my opic loss aversion,'' which assumes that people are myopic in evaluati ng outcomes over time, and are more sensitive to losses than to gains. The results have relevance for the equity premium puzzle, and also fo r the marketing strategies of fund managers.