DOES REMINDING OF BEHAVIOURAL BIASES INCREASE RETURNS FROM FINANCIAL TRADING? A FIELD EXPERIMENT
Maria De Paola (),
Francesca Gioia () and
Fabio Piluso ()
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Fabio Piluso: Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria
No 201705, Working Papers from Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF
We ran a field experiment to investigate whether nudge policies, consisting in behavioural insight messaging, help to improve performance in financial trading. Our experiment involved students enrolled in a financial trading course in an Italian University who were invited to trade on Borsa Italiana’s virtual platform. Students were randomly assigned to a control group and a treatment group. Treated students received a message reminding them of the existence of behavioural biases in financial trading. We find that treated students significantly improve the performance of their portfolio. This effect is mainly driven by students with a higher than average risk aversion. Several behaviours may explain the increase in performance. We find evidence pointing to a reduction in the home and status quo biases for risk averse nudged participants.
Keywords: Financial trading; Behavioural biases; Reminders; Nudges; Home bias; Status quo bias; Risk aversion (search for similar items in EconPapers)
JEL-codes: D14 E21 E22 O16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-hrm, nep-mac and nep-upt
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http://www.ecostat.unical.it/RePEc/WorkingPapers/WP05_2017.pdf First version, 2017-07 (application/pdf)
Working Paper: Does Reminding of Behavioural Biases Increase Returns from Financial Trading? A Field Experiment (2017)
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