'Gamified' apps push DIY traders to make riskier investments: Study
BNN Bloomberg
The "meme stock'" phenomenon of early 2021 gave Marius Zoican, a professor of finance at University of Toronto, an idea.
TORONTO -- The "meme stock'" phenomenon of early 2021, which saw social media-based investors push back against Wall Street by piling into stocks such as GameStop and BlackBerry, gave Marius Zoican an idea.
As the mobile trading app Robinhood was the platform of choice for the meme stock movement, the assistant professor of finance at the University of Toronto wondered how much of a role "gamified'' apps played in risky behaviour among retail traders.
So Zoican, along with fellow researchers Philipp Chapkovski and Mariana Khapko, conducted a study comparing how investors behaved on gamified apps, which feature game design elements, versus standard trading apps.
Participants were assigned to either a simple trading app, or a gamified app that mimicked features found on existing platforms, such as bursts of confetti after a trade, animations and other prompts, Zoican said.
Participants, on average, were 31 or 32 years old, in line with the demographic who typically use commission-free trading apps, he added.
The study, published in December, discovered that investors using gamified trading apps took on more risk, especially when trading high-volatility assets.
