Mind & Society

, Volume 11, Issue 2, pp 203–233 | Cite as

How do common investors behave? Information search and portfolio choice among bank customers and university students

  • Marco Monti
  • Riccardo BoeroEmail author
  • Nathan Berg
  • Gerd Gigerenzer
  • Laura Martignon


Bank customers are not financial experts, and yet they make high-stakes decisions that can substantively affect personal wealth. Sooner or later, every individual has to take relevant investment decisions. Using data collected from financial advisors, bank customers and university students in Italy, this paper aims to reveal new insights about the decision processes of average non-expert investors: their investment goals, the information sets they consider, and the factors that ultimately influence decisions about investment products. Using four portfolio choice tasks based on data collected directly from financial advisors and their clients, we find that most subjects used a limited set of information, ignoring factors that conventional economic models usually assume drive investor behavior. Furthermore, we suggest that non-compensatory decision-tree models, which make no trade-offs among investment features, are parsimonious descriptions of investor behavior useful for improving the organization of financial institutions and in policy contexts alike.


Behavioral finance Investment decision Portfolio composition Non-compensatory heuristic Recognition heuristic Ecological rationality 



We thank John Payne for very helpful comments and Michela Balconi for her ideas regarding data analysis. We also thank Davide Donati, general director of the Cassa Rurale Giudicarie Valsabbia Paganella, and all the Board of Executives, for their full support in conducting on-site research at their banks. We likewise thank Marcel Jentsch for valuable help programming and designing interactive interfaces. Riccardo Boero acknowledges financial support from Regione Piemonte [IIINBEMA Research Project].


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Copyright information

© Springer-Verlag 2012

Authors and Affiliations

  • Marco Monti
    • 1
  • Riccardo Boero
    • 2
    Email author
  • Nathan Berg
    • 3
  • Gerd Gigerenzer
    • 1
  • Laura Martignon
    • 4
  1. 1.Max Planck Institute for Human Development-BerlinBerlinGermany
  2. 2.Department of Economics and Public FinanceUniversity of TorinoTurinItaly
  3. 3.School of Economic, Political and Policy SciencesUniversity of Texas-DallasRichardsonUSA
  4. 4.Institut für Mathematik und InformatikUniversity of Education-LudwigsburgLudwigsburgGermany

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