Pub Date : 2025-08-06DOI: 10.1016/j.jbef.2025.101091
Ann L. Owen , Judit Temesvary , Andrew Wei
Existing literature has studied the role of within-firm networks, but given that the vast majority of connections are between men, its conclusions are not generalizable to connections of women. We study how connected female versus male board members affect performance in the U.S. banking industry. We find that better connected female board members improve bank profitability and reduce earnings management, especially when women are connected to men. We find somewhat weaker evidence that connections between men reduce bank performance. Consistent with the experimental literature, our findings suggest that connections may improve board functioning, allowing female board members to gain influence and participate more effectively in firm governance.
{"title":"Board of Directors’ connections, gender, and firm performance in a male-dominated industry: Evidence from U.S. banking","authors":"Ann L. Owen , Judit Temesvary , Andrew Wei","doi":"10.1016/j.jbef.2025.101091","DOIUrl":"10.1016/j.jbef.2025.101091","url":null,"abstract":"<div><div>Existing literature has studied the role of within-firm networks, but given that the vast majority of connections are between men, its conclusions are not generalizable to connections of women. We study how connected female versus male board members affect performance in the U.S. banking industry. We find that better connected female board members improve bank profitability and reduce earnings management, especially when women are connected to men. We find somewhat weaker evidence that connections between men reduce bank performance. Consistent with the experimental literature, our findings suggest that connections may improve board functioning, allowing female board members to gain influence and participate more effectively in firm governance.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101091"},"PeriodicalIF":4.7,"publicationDate":"2025-08-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144842627","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-29DOI: 10.1016/j.jbef.2025.101088
John P. Harrison, Subhashish Samaddar
On-screen Reading vs. On-paper Reading: Does It Influence Trust and Risk Differently?
The current shift in reading medium is from on-paper reading to reading on electronic screen. Not tested to date is whether the reading medium has any effect on investment behaviors such as trust and risk. Through a field experiment, we tested subjects (N = min 209) who were recruited online, ranging in age from 18 to 69 years for reading both on screen and on paper.
The results showed that the reading medium had no significant effect on the subjects’ self-reported trust but had a significant effect on self-reported risk tolerance, with reading on screen showing markedly more risk tolerance especially in younger ages. The results also showed increased trust with age in reading financial material, and as expected risk tolerance was shown to be significantly negatively related to age. These results imply that reading financial material on screen will result in a higher risk tolerance than would reading the same financial material on paper.
屏幕阅读与纸上阅读：对信任和风险的影响不同吗？当前的阅读媒介是从纸质阅读向电子屏幕阅读转变。阅读媒介是否对信任和风险等投资行为有影响，迄今尚未得到检验。通过实地实验，我们测试了在线招募的受试者（N = min 209），年龄从18岁到69岁不等，阅读屏幕和纸质书。结果表明，阅读媒介对被试自我报告的信任没有显著影响，但对自我报告的风险承受能力有显著影响，屏幕阅读明显表现出更强的风险承受能力，尤其是在年龄较小的人群中。结果还显示，在阅读金融材料时，随着年龄的增长，信任度增加，正如预期的那样，风险承受能力与年龄呈显著负相关。这些结果表明，在屏幕上阅读金融材料会比在纸上阅读同样的金融材料产生更高的风险承受能力。
{"title":"On-screen reading vs. On-paper reading: Does it influence trust and risk differently?","authors":"John P. Harrison, Subhashish Samaddar","doi":"10.1016/j.jbef.2025.101088","DOIUrl":"10.1016/j.jbef.2025.101088","url":null,"abstract":"<div><div>On-screen Reading vs. On-paper Reading: Does It Influence Trust and Risk Differently?</div><div>The current shift in reading medium is from on-paper reading to reading on electronic screen. Not tested to date is whether the reading medium has any effect on investment behaviors such as trust and risk. Through a field experiment, we tested subjects (<em>N</em> = min 209) who were recruited online, ranging in age from 18 to 69 years for reading both on screen and on paper.</div><div>The results showed that the reading medium had no significant effect on the subjects’ self-reported trust but had a significant effect on self-reported risk tolerance, with reading on screen showing markedly more risk tolerance especially in younger ages. The results also showed increased trust with age in reading financial material, and as expected risk tolerance was shown to be significantly negatively related to age. These results imply that reading financial material on screen will result in a higher risk tolerance than would reading the same financial material on paper.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101088"},"PeriodicalIF":4.7,"publicationDate":"2025-07-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144770776","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-24DOI: 10.1016/j.jbef.2025.101086
Malvika Chhatwani
We investigate the impact of financial overconfidence on credit card behavior among men and women. We operationalize financial overconfidence as a discrepancy between objective and subjective financial literacy. Utilizing a dataset comprising 19,795 individuals, our analysis reveals a significant positive relationship between financial overconfidence and credit card delinquency. Further, we also find that financial overconfidence is significantly weaker among women as compared to men. Our findings are robust to several robustness tests using additional control variables or different operationalizations of independent and dependent variables. These findings offer intriguing practical implications, suggesting a gender-specific intervention to address the effects of financial overconfidence on credit card usage. The theoretical and practical contributions of our research are discussed.
{"title":"Girls will be girls? The gendered effect of financial overconfidence on credit card delinquency","authors":"Malvika Chhatwani","doi":"10.1016/j.jbef.2025.101086","DOIUrl":"10.1016/j.jbef.2025.101086","url":null,"abstract":"<div><div>We investigate the impact of financial overconfidence on credit card behavior among men and women. We operationalize financial overconfidence as a discrepancy between objective and subjective financial literacy. Utilizing a dataset comprising 19,795 individuals, our analysis reveals a significant positive relationship between financial overconfidence and credit card delinquency. Further, we also find that financial overconfidence is significantly weaker among women as compared to men. Our findings are robust to several robustness tests using additional control variables or different operationalizations of independent and dependent variables. These findings offer intriguing practical implications, suggesting a gender-specific intervention to address the effects of financial overconfidence on credit card usage. The theoretical and practical contributions of our research are discussed.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101086"},"PeriodicalIF":4.7,"publicationDate":"2025-07-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144722944","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-21DOI: 10.1016/j.jbef.2025.101082
Hamid Yahyaei , Abhay Singh, Tom Smith
We examine the relationship between the business cycle, sentiment, and the returns of listed U.S. hedge funds. Using Natural Language Processing (NLP) techniques, we construct a novel measure of hedge fund sentiment by mapping fund-level sentiment scores to hand-collected portfolio manager commentaries. Our empirical analysis shows that business cycle fluctuations exert the strongest influence on hedge fund sentiment, outweighing the effects of geopolitical, trade, and climate policy risks. Moreover, hedge fund sentiment exhibits explanatory power for the cross-section of returns, where a one-unit improvement in sentiment (from neutral to positive) is associated with an average annual return increase of approximately 0.74 percentage points.
{"title":"How does the smart money feel? Hedge fund sentiment, returns, and the business cycle","authors":"Hamid Yahyaei , Abhay Singh, Tom Smith","doi":"10.1016/j.jbef.2025.101082","DOIUrl":"10.1016/j.jbef.2025.101082","url":null,"abstract":"<div><div>We examine the relationship between the business cycle, sentiment, and the returns of listed U.S. hedge funds. Using Natural Language Processing (NLP) techniques, we construct a novel measure of hedge fund sentiment by mapping fund-level sentiment scores to hand-collected portfolio manager commentaries. Our empirical analysis shows that business cycle fluctuations exert the strongest influence on hedge fund sentiment, outweighing the effects of geopolitical, trade, and climate policy risks. Moreover, hedge fund sentiment exhibits explanatory power for the cross-section of returns, where a one-unit improvement in sentiment (from neutral to positive) is associated with an average annual return increase of approximately 0.74 percentage points.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101082"},"PeriodicalIF":4.3,"publicationDate":"2025-07-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144672571","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-19DOI: 10.1016/j.jbef.2025.101084
Douglas Davis, Oleg Korenok, John Lightle
We report a laboratory experiment that evaluates the impact of public information disclosures on a real decision maker’s capacity to learn about the components of a multi-attribute asset in an environment with endogenous information acquisition. The environment, inspired by Goldstein and Yang (2019), features an asset of uncertain value that consists of two inseparable components. A real decision maker has much more precise information than the market about one component, but no better information than the market about the other. Following the release of the public signal, speculators make private information acquisition decisions for each component. The model predicts that to best learn about the value of the component for which they are relatively uninformed, the real decision maker should disclose information about that which they know more. Despite smaller than expected differences in prices across treatments, experimental results largely support this prediction.
{"title":"The effects of public disclosures and information acquisition on price informativeness in a multi-attribute asset market","authors":"Douglas Davis, Oleg Korenok, John Lightle","doi":"10.1016/j.jbef.2025.101084","DOIUrl":"10.1016/j.jbef.2025.101084","url":null,"abstract":"<div><div>We report a laboratory experiment that evaluates the impact of public information disclosures on a real decision maker’s capacity to learn about the components of a multi-attribute asset in an environment with endogenous information acquisition. The environment, inspired by Goldstein and Yang (2019), features an asset of uncertain value that consists of two inseparable components. A real decision maker has much more precise information than the market about one component, but no better information than the market about the other. Following the release of the public signal, speculators make private information acquisition decisions for each component. The model predicts that to best learn about the value of the component for which they are relatively uninformed, the real decision maker should disclose information about that which they know more. Despite smaller than expected differences in prices across treatments, experimental results largely support this prediction.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101084"},"PeriodicalIF":4.3,"publicationDate":"2025-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144702530","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-16DOI: 10.1016/j.jbef.2025.101083
Yixuan Rui, Robert B. Durand
Hedge funds tend to significantly reduce their shareholdings when a firm’s short interest is high and its share price is close to its 52-week high. In addition, hedge funds in general are more likely to increase their holdings when the share price is falling away from its 52-week high and the short interest is low. Mutual funds, pension funds, and other institutional investors typically do not engage in such specialized trading strategies. The trading behavior of hedge funds demonstrates that they follow a contrarian strategy and use short interest to exploit the near-term reversal of price movements.
{"title":"Hedge Funds, Short Sales, and the 52-week High","authors":"Yixuan Rui, Robert B. Durand","doi":"10.1016/j.jbef.2025.101083","DOIUrl":"10.1016/j.jbef.2025.101083","url":null,"abstract":"<div><div>Hedge funds tend to significantly <em>reduce</em> their shareholdings when a firm’s short interest is high and its share price is close to its 52-week high. In addition, hedge funds in general are more likely to <em>increase</em> their holdings when the share price is falling away from its 52-week high and the short interest is low. Mutual funds, pension funds, and other institutional investors typically do not engage in such specialized trading strategies. The trading behavior of hedge funds demonstrates that they follow a contrarian strategy and use short interest to exploit the near-term reversal of price movements.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101083"},"PeriodicalIF":4.7,"publicationDate":"2025-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144842626","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-04DOI: 10.1016/j.jbef.2025.101081
Zilong Liu, Hongyan Liang
This study investigates whether credit scoring systems inherently disadvantage women within the subprime borrowing context, where alternative credit data is frequently used. While recent advancements in machine learning and alternative data usage promise greater fairness and accuracy in lending, our findings highlight systemic biases embedded within current credit scoring models. Using a comprehensive sample of alternative borrowers, our analysis reveals that women consistently receive lower credit scores than men, despite exhibiting lower default rates and controlling for extensive credit risk variables. Furthermore, credit scores demonstrate systematically reduced predictive accuracy for women compared to men, underscoring gender biases embedded within these scoring systems. These findings emphasize the urgent need to recalibrate credit scoring models to enhance fairness, accuracy, and financial inclusivity.
{"title":"Are credit scores gender-neutral? Evidence of mis-calibration from alternative and traditional borrowing data","authors":"Zilong Liu, Hongyan Liang","doi":"10.1016/j.jbef.2025.101081","DOIUrl":"10.1016/j.jbef.2025.101081","url":null,"abstract":"<div><div>This study investigates whether credit scoring systems inherently disadvantage women within the subprime borrowing context, where alternative credit data is frequently used. While recent advancements in machine learning and alternative data usage promise greater fairness and accuracy in lending, our findings highlight systemic biases embedded within current credit scoring models. Using a comprehensive sample of alternative borrowers, our analysis reveals that women consistently receive lower credit scores than men, despite exhibiting lower default rates and controlling for extensive credit risk variables. Furthermore, credit scores demonstrate systematically reduced predictive accuracy for women compared to men, underscoring gender biases embedded within these scoring systems. These findings emphasize the urgent need to recalibrate credit scoring models to enhance fairness, accuracy, and financial inclusivity.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101081"},"PeriodicalIF":4.3,"publicationDate":"2025-07-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144595732","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-04DOI: 10.1016/j.jbef.2025.101080
Zunaidah Sulong , Md. Habibur Rahman Fuszder , Mohammad Abdullah , Emmanuel Joel Aikins Abakah
This paper investigates the influence of cybersecurity risk on banks’ risk-taking behavior. Utilizing data from U.S. banks spanning 1998–2018, we find that heightened cybersecurity risk is associated with increased risk-taking by banks. These findings remain robust across various alternative proxies and persist even after addressing endogeneity issues. Further analysis indicates that this positive relationship is more pronounced among banks facing greater competitive pressure, higher IT investment, increased deposit withdrawals, and more negative disclosure sentiment. Conversely, the relationship is attenuated in banks with substantial goodwill and a more positive disclosure tone. Sub-sample analyses show that the effect is particularly strong for smaller banks and those with elevated financial vulnerability. These findings have important implications for the digital transformation of the banking sector.
{"title":"Cybersecurity risk and bank risk-taking","authors":"Zunaidah Sulong , Md. Habibur Rahman Fuszder , Mohammad Abdullah , Emmanuel Joel Aikins Abakah","doi":"10.1016/j.jbef.2025.101080","DOIUrl":"10.1016/j.jbef.2025.101080","url":null,"abstract":"<div><div>This paper investigates the influence of cybersecurity risk on banks’ risk-taking behavior. Utilizing data from U.S. banks spanning 1998–2018, we find that heightened cybersecurity risk is associated with increased risk-taking by banks. These findings remain robust across various alternative proxies and persist even after addressing endogeneity issues. Further analysis indicates that this positive relationship is more pronounced among banks facing greater competitive pressure, higher IT investment, increased deposit withdrawals, and more negative disclosure sentiment. Conversely, the relationship is attenuated in banks with substantial goodwill and a more positive disclosure tone. Sub-sample analyses show that the effect is particularly strong for smaller banks and those with elevated financial vulnerability. These findings have important implications for the digital transformation of the banking sector.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101080"},"PeriodicalIF":4.3,"publicationDate":"2025-07-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144581231","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-27DOI: 10.1016/j.jbef.2025.101079
Han Ren , Shiwei Sun , Zhengqiang Zhong , Song Wang
Understanding why females and males differ in financial risk-taking is important for both theory and practice. This study integrates neuroscience and behavioral data to examine how sex differences in brain structure-indexed by gray matter volume (GMV)-and brain function-indexed by resting-state functional connectivity (RSFC)-relate to financial risk propensity (FRP) among full-time employees (N = 144; 72 females, 72 males). We found that the association between FRP and GMV in the left superior parietal lobule (SPL), a region involved in emotion regulation and numerical processing, was positive in females but negative in males. Additionally, only in females was lower FRP linked to stronger RSFC between the left SPL and the right hippocampus, a region critical for future-oriented thinking and memory. We also found a significant indirect effect of FRP on the relationship between RSFC and willingness to take risks in investment and career domains for females, but not for males. These findings suggest that in females, greater neural integration of emotional control, numerical reasoning, and prospection may support more cautious financial decisions. This research offers new insights into the neural basis of sex differences in financial decision-making and carries important theoretical and practical implications.
{"title":"Why do females display lower financial risk propensity than males? Evidence from structural MRI and resting-state fMRI","authors":"Han Ren , Shiwei Sun , Zhengqiang Zhong , Song Wang","doi":"10.1016/j.jbef.2025.101079","DOIUrl":"10.1016/j.jbef.2025.101079","url":null,"abstract":"<div><div>Understanding why females and males differ in financial risk-taking is important for both theory and practice. This study integrates neuroscience and behavioral data to examine how sex differences in brain structure-indexed by gray matter volume (GMV)-and brain function-indexed by resting-state functional connectivity (RSFC)-relate to financial risk propensity (FRP) among full-time employees (N = 144; 72 females, 72 males). We found that the association between FRP and GMV in the left superior parietal lobule (SPL), a region involved in emotion regulation and numerical processing, was positive in females but negative in males. Additionally, only in females was lower FRP linked to stronger RSFC between the left SPL and the right hippocampus, a region critical for future-oriented thinking and memory. We also found a significant indirect effect of FRP on the relationship between RSFC and willingness to take risks in investment and career domains for females, but not for males. These findings suggest that in females, greater neural integration of emotional control, numerical reasoning, and prospection may support more cautious financial decisions. This research offers new insights into the neural basis of sex differences in financial decision-making and carries important theoretical and practical implications.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101079"},"PeriodicalIF":4.3,"publicationDate":"2025-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144500897","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Interpreting complex financial regulatory texts, such as the Basel III Accords, can be challenging even for human experts. In this paper, we explore the potential of Large Language Models (LLMs) to perform such tasks. Specifically, we evaluate reasoning strategies, namely Chain-of-Thought (CoT) and Tree-of-Thought (ToT), in their ability to assign accurate risk weights to test cases based on the Basel III Standardized Approach (SA) for Credit Risk. Moreover, we propose and test a guided learning-based few-shot variant of CoT and ToT using human expert input. By evaluating 6,501 test cases, comprised of diverse exposure scenarios, our results demonstrate that few-shot prompting with CoT as well as ToT significantly enhances the LLMs’ accuracy in inferring risk weights. For one-shot CoT, we observe gains of almost 13 percentage points in accuracy with GPT-4o, whereas Claude 3 Sonnet shows gains of more than 10 percentage points. Albeit smaller in magnitude, one-shot ToT improvements are around 9 percentage points.
{"title":"Reasoning with financial regulatory texts via Large Language Models","authors":"Bledar Fazlija , Meriton Ibraimi , Aynaz Forouzandeh , Arber Fazlija","doi":"10.1016/j.jbef.2025.101067","DOIUrl":"10.1016/j.jbef.2025.101067","url":null,"abstract":"<div><div>Interpreting complex financial regulatory texts, such as the Basel III Accords, can be challenging even for human experts. In this paper, we explore the potential of Large Language Models (LLMs) to perform such tasks. Specifically, we evaluate reasoning strategies, namely Chain-of-Thought (CoT) and Tree-of-Thought (ToT), in their ability to assign accurate risk weights to test cases based on the Basel III Standardized Approach (SA) for Credit Risk. Moreover, we propose and test a guided learning-based few-shot variant of CoT and ToT using human expert input. By evaluating 6,501 test cases, comprised of diverse exposure scenarios, our results demonstrate that few-shot prompting with CoT as well as ToT significantly enhances the LLMs’ accuracy in inferring risk weights. For one-shot CoT, we observe gains of almost 13 percentage points in accuracy with GPT-4o, whereas Claude 3 Sonnet shows gains of more than 10 percentage points. Albeit smaller in magnitude, one-shot ToT improvements are around 9 percentage points.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101067"},"PeriodicalIF":4.3,"publicationDate":"2025-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144511019","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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