Fabian Gouret|Guillaume Hollard
When Kahneman meets Manski: Using dual systems of reasoning to interpret subjective expectations of equity returns
Universitat de Barcelona|Paris School of Economics|French National Centre for Scientific Research
abstract understand decisions invest stocks taken economists need elicit expectations regarding riskreturn tradeoff one surveys elicited expectations survey economic expectations 19992001 using data survey dominitz manski find considerable heterogeneity across respondents cannot explained simple models expectations formation adapting principle dual reasoning borrowed kahneman paper classifies respondents according sensitivity pathologies find substantial amount unobserved heterogeneity least sensitive respondents sketch model expectations formation copyright 2010 john wiley amp sons ltd