Tail Risk Neglect: Part 2

We field a series of questions related to memories, experiences, and tail beliefs, in particular related to large stock market movements.

We field the following ordered list of questions (key parts translated from German, full questionnaire available online). Some questions are only asked to a subset of respondents and hence act as treatments. If not otherwise mentioned, the questions are asked to all respondents in our sample.
- How many ATMs are there in Germany?
- Which of the following situations have you personally experienced in your life? (multiple choice answers: a) unemployment, b) refugee / migration, c) substantial losses in financial investments, d) inability to service debt, e) employment with elevated security or health risks, f) significant health adversities, g) other significant economic or financial problems, g) other significant personal problems)
- Treatment groups 2 and 4: Thinking about the last 60 years. Which events have led to large increases or decreases of the German stock market index DAX? (Answer: list of text fields and years)
- Treatment group 5: Thinking about important events in society, culture , and sports over the last 60 years. Which events have played a major role in Germany? (Answer: list of text fields and years)
- What do you think, how much did the DAX increase or decrease in the course of these events?
- Treatment group 4: Receives an information treatment in the form of a list of actual DAX crashes over the past 60 years. List of 11 events with text, year, and size of DAX change in percent.
- Conditional magnitude: Suppose during the next 12 months there was a stock market crash in Germany. What do you think would be the decline of the DAX in this case? (Input: decline of DAX in percent)
- Probability: And what do you think is the likelihood that there will be such a crash in the next 12 months?
- Scenarios (Bloom question, Part 1): List of 5 scenarios (worst, bad, median, good, best case). Which percentage change of the DAX do you expect in each case?
- Scenarios (Part 2): For each of the 5 scenarios you indicated, please give the probability that the respective scenario will happen. (Probabilities should sum to 100.)
- Treatment group 3 (same question as above but ordered at end of the set of questions): Thinking about the last 60 years. Which events have laid to large increases or decreases of the German stock market index DAX? (Answer: list of text fields and years)
- Treatment group 3 (same question as above but ordered at end of the set of questions): What do you think, how much did the DAX increase or decrease in the course of these events?

2023-08-14

2023-09-01

- number of ATMs, i.e. cash machines (as a proxy for estimating small probabilities even in domains without risk)
- list of experiences personally encountered
- list of events over the last 60 years (group 2-4: stock market related, group 3: society, culture, sports)
- DAX change in the course of each of these events
- conditional magnitude
- probability
- Scenario Part 1
- Scenario Part 2

THE FULL QUESTIONNAIRE WILL BE AVAILABLE ON THE WEBSITE OF THE BUNDESBANK SURVEY OF CONSUMER EXPECTATIONS (SEE LINK) SHORTLY AFTER THE FIELD PERIOD OF THE AUGUST 2023 WAVE.

Respondents are randomly assigned into different groups. One group receives an information treatment. The other groups receive our survey questions in different ordering (the ordering of certain questions acting as a treatment).

randomization done by a computer

Individual

No

4

4,000 respondents

1,000 per treatment arm