Our study aims at better understanding the effect of return presentation formats and ownership on investors’ attraction to seemingly unattractive financial products. Retail investors regularly buy financial products that exhibit a picking pennies return profile—that is, products that typically offer small positive returns with occasional large losses. Although these products deliver low average returns and lack lottery-like features that investors prefer in other contexts (Barberis and Huang 2008; Boyer, Mitton, and Vorkink 2010; Vokata 2021, 2023), they are attractive to retail investors. We investigate how common ways of presenting and experiencing return information make these products attractive for (retail) investors.

2025

2026