Does the Internet Increase Trading? Evidence from Investor Behavior in 401(k) Plans

James Choi, David Laibson and Andrew Metrick

No 7878, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We analyze the impact of a Web-based trading channel on the trading activity in two corporate 401(k) plans. Using detailed data on about 100,000 participants, we compare trading growth in these firms to growth for a sample of firms without a Web channel. After 18 months of access, the inferred Web effect is very large: trading frequency doubles, and portfolio turnover rises by over 50 percent. We also document several patterns of Web-trading behavior. Young, male, and wealthy participants are more likely to try the Web channel. Frequent traders (before Web introduction) are less likely to try the Web. Participants who try the Web tend to stick with it. Web trades tend to be smaller than phone trades both in dollars and as a fraction of portfolio. Short-term' trades make up a higher proportion of phone trades than of Web trades.

JEL-codes: D0 G0 (search for similar items in EconPapers)
Date: 2000-09
Note: AP
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Published as Choi, James J., David Laibson, and Andrew Metrick. "How Does the Internet Affect Trading? Evidence from Investor Behavior in 401(k) Plans." Journal of Financial Economics 64 (June 2002): 397-421.

Downloads: (external link)
http://www.nber.org/papers/w7878.pdf (application/pdf)

Related works:
Working Paper: Does the Internet Increase Trading? Evidence from Investor Behavior in 401(K) Plans
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:7878

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w7878

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().