M. Merli publishes in Journal of Economic Behavior & Organization


Maxime Merli, full professor at EMSBS, recently published an article in volume 188 of the Journal of Economic Behavior & Organization (CNRS cat. 2).

The article entitled “Do retail investors bite off more than they can chew? A close look at their return objectives” was written in collaboration with Catherine D’Hondt et Rudy De Winne (Louvain School of Management).


Using self-reported retail investor information from a risk-return profile survey, we investigate the determinants of individual return objectives as well as the capacity of investors to achieve them. Controlling for a large set of covariates, we provide empirical evidence that return objectives are related to subjective individual characteristics (such as financial literacy and risk tolerance), some sociodemographic variables (age and education), and recent past trading intensity. Retail investors with higher return objectives perform better than their counterparts who want to avoid any risk of capital loss. The capacity to achieve the return objective, however, decreases as the level of the objective increases.

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