Location

Wiesner Room, 2nd Floor, MIT Media Lab

Description

Marco Monti will present two talks at the next Center for Future Banking event.
(1) Trust Formation and Risk Communication in Finance and Health Care: An Empirical Survey on Investor-Advisor and Patient-Doctor Interactions
This research aims at investigating mechanisms for trust formation and risk communication in two domains: finance and health care. We collected data on the interactions between investors and advisors on one the hand, and patients and doctors on the other hand. The aim was to investigate common features of interacting mechanisms. We analyzed how subjects understand and frame concepts in both domains and make decisions. We studied the role of analogies and metaphors for enhancing communication quality. We also considered the role of advisors in supporting/modulating subjects’ decisions outcomes. Trust is an important asset in modern societies which has to be constantly preserved from erosion and decay.
(2) Investment Decisions: Fast and Frugal Heuristics at Work
This paper aims to uncover the decision processes used by average investors, including their investment goals, the information sets they consider, and the number of factors that influence their financial decisions. We present new experimental and survey data collected from bank customers at several Italian banks. Most subjects use a strict subset of the information available to them, ignoring variables that standard economic models typically assume drive investors’ behavior. Fast and information-frugal heuristics model the information search of many subjects observed in this study, reflecting a noncompensatory-lexicographic hierarchy of features, risk, time horizon, and cost, considered in that order. Decision behavior reflects a simple combination of a fast and frugal tree and a tallying rule, predicting 78% of investors’ decisions.

Additional Featured Research By

(Unpublished) Center for Future Banking

Host/Chair: (Unpublished) Center for Future Banking