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Leverage and Beliefs: Personal Experience and Risk-Taking in Margin Lending

Peter Koudijs, Hans-Joachim Voth

American Economic Review 106(11), pp. 3367-3400 (2016)

Published version SSRN Data

Abstract

What determines risk-bearing capacity and the amount of leverage in financial markets? Using unique archival data on collateralized lending, we show that personal experience can affect individual risk-taking and aggregate leverage.

Keywords
leverage, beliefs, risk-taking, margin lending, financial history
DOI
10.1257/aer.20140259
Canonical
https://www.jvoth.com/papers/leverage-and-beliefs.html

Peter Koudijs, Hans-Joachim Voth (2016). “Leverage and Beliefs: Personal Experience and Risk-Taking in Margin Lending.” American Economic Review.