Gazing through the bubble: an experimental investigation into financial risk-taking using eye-tracking

Financial Innovation

Table 4 Estimates of the PSTR model

The reports results of the PSTR estimation for both experiments (upper and lower sections denoted as A and B) for the first two periods: holdings and decision-making. The first two rows from both A and B report \(\beta\) estimates of the exogenous variables for the log returns (columns 1–4) as the dependent variable in both transition functions. Column (\(\beta_{0} + \beta_{1} )\) represents the effect of the corresponding variable in the second regime (i.e., when attention is above the estimated threshold) and holds only when both coefficients are statistically significant (in bold). The last three rows report information for the Wald regime test, having as a null hypothesis the existence of two threshold functions, the slope of the function (the \(\gamma\) variable) and the location parameter—the threshold between the two regimes. For the first trading round, attention variable is given by the average distance from the lower center of the screen and for the second trading round, attention is calculated as the average distance from the center of the screen. Statistical significance at the 1, 5 and 10 confidence levels is indicated using ***, ** and *.