Gamified Risk-Taking

43 Pages Posted: 27 Aug 2024

See all articles by Philipp Chapkovski

Philipp Chapkovski

University of Duisburg-Essen - Institute of Political Science

Mariana Khapko

University of Toronto - Finance Area; Swedish House of Finance

Marius Zoican

University of Calgary - Haskayne School of Business

Multiple version iconThere are 2 versions of this paper

Abstract

We run a randomized online experiment to study the impact of trading platform gamification on retail traders’ risk taking. We recruit 605 participants from four countries, two-thirds of them reporting self-directed trading experience, to trade a virtual asset on an experimental platform. The gamified version of the platform features elements such as achievement badges or encouragement messages. We find that gamification “nudges” participants to take on more risk, particularly when trading high-volatility assets. The effect is stronger for inexperienced traders with lower financial literacy. A one standard deviation increase in the financial literacy score reduces the impact of gamification by 56%.

Keywords: gamification, risk, experimental finance, financial literacy, retail trading

Suggested Citation

Chapkovski, Philipp and Khapko, Mariana and Zoican, Marius, Gamified Risk-Taking. Available at SSRN: https://ssrn.com/abstract=4938750 or http://dx.doi.org/10.2139/ssrn.4938750

Philipp Chapkovski

University of Duisburg-Essen - Institute of Political Science ( email )

Lotharstrasse 65
Duisburg, D-47057
Germany

HOME PAGE: http://https://www.uni-due.de/politik/chapkovski.php

Mariana Khapko (Contact Author)

University of Toronto - Finance Area ( email )

Toronto, Ontario M5S 3E6
Canada

Swedish House of Finance ( email )

Drottninggatan 98
Stockholm
Sweden

Marius Zoican

University of Calgary - Haskayne School of Business ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

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