Household Portfolio Underdiversification and Probability Weighting: Evidence from the Field

This paper is part of the NBER’s Research Program on the Economics of Aging and the Working Group on Household Portfolios. For assistance with the survey, the authors gratefully acknowledge Tim Colvin, David Grant, and the American Life Panel team at the RAND Corporation. For comments, we thank Nishad Kapadia, Alexander Klos, Sonya Lim, Gianpaolo Parise, Valery Polkovnichenko, Peter Wakker, and Joe Zhang; seminar participants at EDHEC, HEC Paris, IESE Business School, London School of Economics, University of Cambridge, and University of Warwick; and participants at the Financial Intermediation Research Society, SFS Cavalcade, Singapore Symposium, TIAA/PRC Symposium, and Western Finance Association. Yunju Cha and Yong Yu provided outstanding research assistance. This project received funding from the TIAA Institute and Wharton School’s Pension Research Council/Boettner Center. The content is solely the responsibility of the authors and does not represent official views of the TIAA Institute or the Wharton School’s Pension Research Council/Boettner Center. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

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