Abstract: A randomized investment experiment is made based on a Chinas individual investor sample under the circumstance of low interest rates, in order to verify the impact of interest rates on the risk taking of Chinas individual investors, and to support the existence of Chinas monetary policy risk-taking channels from the individual level of investment decision. The results show that: (1) Interest rates have a significantly negative effect on risky-assets allocation of Chinas individual investors, and the effect is non-linear under the circumstance of low interest rates. The falling interest rates influences individual investors psychological expectation, which makes investment decision change with the changes of value function mechanism. (2) There is no obvious difference in risk taking of Chinese and American individual investors, although there are differences in culture and state systems, searching-for-yield behavior is consistent between Chinese and American investors.

Key words:  interest rates, risk taking, individual investors, searching for yield