Academy of Finland grant to the Department of Finance
Finance Associate Professor Elias Rantapuska and his team have received an Academy of Finland grant totalling 480,000 EUR. The funded project is titled "Shortlisted investments – How heuristics affect investment decisions?" and its duration will be 01.09.2019 - 31.08.2023.
Project description:
Traditional finance theory assumes individuals make optimal decisions based on all available information.
Psychologists and behavioral economists have recently established a strong case for more constrained decision-making. An individual cannot simultaneously handle all options, but rather uses a procedure to eliminate alternatives and construct a shortlist, and then makes a decision from the shortlist.
This research project studies study investment shortlisting. By using individual-level data on investment decisions and stock returns, researchers are able to study how family, peers, media, and clarity of information influence the composition of investment shortlists. These channels are not yet well understood. In contrast, our preliminary results suggest that social interaction, media, and presenting information in an understandable format are key contributors to portfolio choice through shortlisting.
The project also aims to help individuals making better investment decisions once they have a shortlist of potential investments.
The research results help to understand and mitigate the sources of wealth inequality in the society.
Operating costs of research databases will be funded from the project. The research databases cater for the needs for hundreds of students and dozens of faculty members within and outside of Department of Finance.
Read more news
Electricity supply in Finland could face a major test in the 2030s as EV charging drives demand
As EVs become more common, the scheduling of their charging could help secure electricity adequacy, especially in winter.
Pressed by the devil , shaped by the future
Curly birch shines in Aalto University’s Wood Studio’s fresh perspectives at the Craft Museum of Finland’s summer exhibition.
When atoms begin to dance – At Aalto University, metallurgy became choreography
On the Dance Metallurgy pilot course, copper ions were given movement and a face. When a metal essential to the green transition stepped onto the dance floor, chemical phenomena that often seem intimidating opened up in an entirely new way.