Abstract
This paper investigates the impact of the COVID-19 pandemic on risk-seeking behavior. Using Holt and Laury's (2002) risk tolerance measure, an online survey was conducted with 1643 participants at seven time points before the pandemic and during four restricted and two unrestricted periods. Results showed a significant reduction in financial risk-taking during the pandemic. Notably, the decrease was most evident in the first wave, despite no major differences across the restricted waves. Risk tolerance began to gradually return when restrictions were lifted but did not reach pre-pandemic levels. Subjective risk tolerance during the pandemic, which differed from the objective financial situation, influenced real-life investment decisions. These findings highlight the influence of contextual and emotional factors on risk tolerance. The results are discussed concerning risk-seeking behavior in commission-free online brokerages like Robinhood during the pandemic, with implications for policy guidelines.