![]() ![]() ![]() Further, we find that depositors respond positively, with increased levels of early withdrawal, to the reinvestment incentive they face when new deposit rates rise. We find that longer-maturity time deposit portfolios commonly experience early withdrawals at economically significant levels. We help to ®ll this gap by examining the level and interest rate sensitivity of early withdrawals of retail time deposits using panel data from the Thrift Financial Report. The option to withdraw commonly found in bank deposits is one of the least studied of these. The embedded options found in some securities are known to have significant impact on product pricing, secondary market valuation, and risk measurement and management. Journal of Financial Services Research, (1999), 15(2), pp. Together, these results suggest that both market experience and market composition play an important role in the equilibrium discovery process. An unexpected result in this regard is that average market efficiency is lowest in markets that match experienced buyers and experienced sellers and highest when experienced buyers engage in bargaining with inexperienced sellers. Second, the data suggest that market composition is important: buyer and seller experience levels impact not only the distribution of rents but also the overall level of rents captured. ![]() First, the competitive model predicts reasonably well in some market treatments: the expected price and quantity levels are approximated in many market rounds. The main results of the study fall into two categories. ![]() In this sense, I am gathering data in a natural environment while still maintaining the necessary control to execute a clean comparison between treatments. A major advantage of this particular field experimental design is that my laboratory is the market place: subjects are engaged in buying, selling, and trading activities whether I run an exchange experiment or am a passive observer. This study presents results from a pilot field experiment that tests predictions of competitive market theory. Proceedings of the National Academy of Science, (2002), 99(24), pp. These results are consistent with conventional expected utility theory for the effects of background risk on attitudes to risk. Behavior tended to be moderately risk averse when artificial monetary prizes were used or when there was minimal uncertainty in the natural nonmonetary outcome, but subjects drawn from the same population were much more risk averse when their attitudes were elicited using the natural nonmonetary outcome that had some background risk. We find that the use of artificial monetary prizes provides a reliable measure of risk attitudes when the natural counter- part outcome has minimal uncertainty, but that it can provide an unreliable measure when the natural counterpart outcome has background risk. Because it is field behavior that we are interested in understanding, those controls might be a confound in themselves if they result in differences in behavior. The controls that are typically employed in laboratory settings, such as the use of abstract lotteries, could lead subjects to employ behavioral rules that differ from the ones they employ in the field. 433-458.ĭoes individual behavior in a laboratory setting provide a reliable indicator of behavior in a naturally occurring setting? We consider this general methodological question in the context of eliciting risk attitudes. List, and Charles ToweĮconometrica, (2007), 75 (2), pp. ![]()
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