Smart(Phone) Investing? A within Investor-Time Analysis of New Technologies and Trading Behavior

71 Pages Posted: 2 Feb 2021 Last revised: 7 May 2021

See all articles by Ankit Kalda

Ankit Kalda

Indiana University - Kelley School of Business - Department of Finance

Benjamin Loos

Technische Universität München (TUM) - TUM School of Management

Alessandro Previtero

Indiana University - Kelley School of Business - Department of Finance; National Bureau of Economic Research (NBER)

Andreas Hackethal

Goethe University Frankfurt - Faculty of Economics and Business Administration; Leibniz Institute for Financial Research SAFE

Multiple version iconThere are 2 versions of this paper

Date Written: January 13, 2021

Abstract

Using transaction-level data from two German banks, we study the effects of smartphones on investor behavior. Comparing trades by the same investor in the same month across different platforms, we find that smartphones increase the purchase of riskier, lottery-type, non-diversifying assets, and of past winners and losers. We find evidence against investors offsetting these trades on other platforms and against digital nudges mechanically driving our results. Smartphone effects are neither transitory nor innocuous: assets purchased via smartphones deliver lower Sharpe ratios. Our findings caution against the indiscriminate use of smartphones as the key technology to increase access to financial markets.

Keywords: fintech, investor behavior, financial risk-taking, lottery-type assets, investment biases

JEL Classification: G11, G40, G50, H31

Suggested Citation

Kalda, Ankit and Loos, Benjamin and Previtero, Alessandro and Hackethal, Andreas, Smart(Phone) Investing? A within Investor-Time Analysis of New Technologies and Trading Behavior (January 13, 2021). SAFE Working Paper No. 303, Available at SSRN: https://ssrn.com/abstract=3765652 or http://dx.doi.org/10.2139/ssrn.3765652

Ankit Kalda

Indiana University - Kelley School of Business - Department of Finance ( email )

1309 E. 10th St.
Bloomington, IN 47405
United States

Benjamin Loos

Technische Universität München (TUM) - TUM School of Management ( email )

Arcisstr. 21
Munich, D-80290
Germany

HOME PAGE: http://www.professors.wi.tum.de/digitalfinance/home/

Alessandro Previtero (Contact Author)

Indiana University - Kelley School of Business - Department of Finance ( email )

1309 E. 10th St.
Bloomington, IN 47405
United States
+1 (512) 581-5420 (Phone)

HOME PAGE: http://aleprevitero.com

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Andreas Hackethal

Goethe University Frankfurt - Faculty of Economics and Business Administration ( email )

Theodor-W.-Adorno Platz 3
Frankfurt am Main, 60323
Germany

Leibniz Institute for Financial Research SAFE ( email )

(http://www.safe-frankfurt.de)
Theodor-W.-Adorno-Platz 3
Frankfurt am Main, 60323
Germany

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