Oral Presentations and Performances: Session III
Project Type
Presentation
Faculty Mentor’s Full Name
Keith Jakob
Faculty Mentor’s Department
Accounting & Finance
Abstract / Artist's Statement
ABSTRACT
While traditional methods of investing remain, such as utilizing established financial advisory services and trading applications, neo-brokerages have gamified their trading platforms. These platforms have become increasingly popular among younger generations. The “gamification of investing” is a phenomenon that involves the integration of game-like features (e.g., haptic feedback, neon colors, confetti) into brokerage applications. This “gamification” has lowered the barriers to entry for investing in capital markets for younger generations but has simultaneously coaxed them into being more risk-tolerant and potentially unaware of the consequences of high-risk investing strategies. This is partly because neo-brokers make it easy to gain access to short-term speculative trading (e.g., margin trading, options trading, prediction market integration). For the uninformed investor, this short-term speculation can be more akin to gambling than it is to investing. While gamified trading platforms increase the user’s ability to execute trades, they do not proportionally increase the financial literacy of the user.
This research draws upon the frameworks of Dual-Process Theory and the Dunning-Kruger effect. An analysis will be conducted through 1) a review of literature pertaining to behavioral finance, and 2) a visual taxonomy of neo-brokerage application interfaces. Additionally, this research will aim to identify if and how neo-brokerage applications attempt to influence the behavior of their users to make emotion-based investment decisions rather than logical ones. Preliminary findings suggest that neo-brokerage applications with contemporary and vibrant user interfaces can lead investors to be overconfident in their investment decisions and potentially adopt a higher tolerance for risk.
Category
Social Sciences
The Gamification of Investing: Young Investors and The Dopamine Desktop
UC 331
ABSTRACT
While traditional methods of investing remain, such as utilizing established financial advisory services and trading applications, neo-brokerages have gamified their trading platforms. These platforms have become increasingly popular among younger generations. The “gamification of investing” is a phenomenon that involves the integration of game-like features (e.g., haptic feedback, neon colors, confetti) into brokerage applications. This “gamification” has lowered the barriers to entry for investing in capital markets for younger generations but has simultaneously coaxed them into being more risk-tolerant and potentially unaware of the consequences of high-risk investing strategies. This is partly because neo-brokers make it easy to gain access to short-term speculative trading (e.g., margin trading, options trading, prediction market integration). For the uninformed investor, this short-term speculation can be more akin to gambling than it is to investing. While gamified trading platforms increase the user’s ability to execute trades, they do not proportionally increase the financial literacy of the user.
This research draws upon the frameworks of Dual-Process Theory and the Dunning-Kruger effect. An analysis will be conducted through 1) a review of literature pertaining to behavioral finance, and 2) a visual taxonomy of neo-brokerage application interfaces. Additionally, this research will aim to identify if and how neo-brokerage applications attempt to influence the behavior of their users to make emotion-based investment decisions rather than logical ones. Preliminary findings suggest that neo-brokerage applications with contemporary and vibrant user interfaces can lead investors to be overconfident in their investment decisions and potentially adopt a higher tolerance for risk.