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

Principal Investigator(s): View help for Principal Investigator(s) Peter Koudijs; Hans-Joachim Voth

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20140259_data			10/12/2019 02:04:AM
LICENSE.txt	text/plain	14.6 KB	10/11/2019 10:04:PM

Project Citation:

Koudijs, Peter, and Voth, Hans-Joachim. Replication data for: Leverage and Beliefs: Personal Experience and Risk-Taking in Margin Lending. Nashville, TN: American Economic Association [publisher], 2016. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E112978V1

Project Description

Summary: 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. When an investor syndicate speculating in Amsterdam in 1772 went bankrupt, many lenders were exposed. In the end, none of them actually lost money. Nonetheless, only those at risk of losing money changed their behavior markedly; they lent with much higher haircuts. The rest continued largely as before. The differential change is remarkable since the distress was public knowledge. Overall leverage in the Amsterdam stock market declined as a result.

Scope of Project

JEL Classification:
      D81 Criteria for Decision-Making under Risk and Uncertainty
      D86 Economics of Contract: Theory
      G12 Asset Pricing; Trading Volume; Bond Interest Rates
      G14 Information and Market Efficiency; Event Studies; Insider Trading
      G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
      G33 Bankruptcy; Liquidation
      N23 Economic History: Financial Markets and Institutions: Europe: Pre-1913

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Published Versions

V1 [2019-10-12]

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DDI 2.5

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