Abstract
We conduct a randomized online experiment to examine how digital nudges to hold volatile assets, a form of trading gamification, influence retail investors’ risk-taking behavior. A sample of 605 participants from four countries traded a virtual asset on an experimental platform. The gamified platform incorporates digital nudges, such as achievement badges and motivational prompts, explicitly designed to encourage holding decisions. We find that nudges significantly amplify risk-taking, particularly in high-volatility environments. The effect is most pronounced among inexperienced traders with lower financial literacy, with a one standard deviation increase in financial literacy reducing the impact by 56%
Marius Zoican
Associate Professor of Finance
I study the impact of (new) technology on securities exchanges and asset management, as well as how to leverage technological innovations to build a better market.