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Does Reminding of Behavioural Biases Increase Returns from Financial Trading? A Field Experiment

Maria De Paola (), Francesca Gioia () and Fabio Piluso ()
Additional contact information
Fabio Piluso: University of Calabria

No 10983, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: 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. 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-eur, nep-exp, nep-hrm, nep-mac and nep-upt
Date: 2017-09
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Working Paper: DOES REMINDING OF BEHAVIOURAL BIASES INCREASE RETURNS FROM FINANCIAL TRADING? A FIELD EXPERIMENT (2017) Downloads
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