Working Paper: NBER ID: w28363
Authors: Ankit Kalda; Benjamin Loos; Alessandro Previtero; Andreas Hackethal
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 purchasing of riskier and lottery-type assets and chasing past returns. After the adoption of smartphones, investors do not substitute trades across platforms and buy also riskier, lottery-type, and hot investments on other platforms. Using smartphones to trade specific assets or during specific hours contributes to explain our results. Digital nudges and the device screen size do not mechanically drive our results. Smartphone effects are not transitory.
Keywords: Smartphones; Investor Behavior; Risk-Taking; Trading Patterns
JEL Codes: G11; G40; G50
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| smartphone usage (L96) | increased purchases of lottery-type stocks (H27) |
| smartphone usage (L96) | enhanced tendency to chase past returns (G41) |
| smartphone adoption (L96) | increased likelihood of engaging in risky trades on non-smartphone platforms (G41) |
| individual investor characteristics + smartphone usage + time of trades (G14) | isolated impact of smartphone usage (L96) |
| investor sentiment + market conditions (G41) | changes in trading behavior (G40) |
| ability to trade anytime (G14) | behavioral changes observed (D91) |
| digital nudges + physical attributes of smartphones (C91) | behavioral shifts (D91) |