Misperceived Returns to Active Investing

Last registered on January 23, 2023
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Pre-Trial

Trial Information

General Information

Title
Misperceived Returns to Active Investing
RCT ID
AEARCTR-0010780
Initial registration date
January 16, 2023

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
January 23, 2023, 6:38 AM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Norway
Region

Primary Investigator

Name
Ingar Haaland
Affiliation
Norwegian School of Economics
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Other Primary Investigator(s)

PI Name
Ole-Andreas Elvik Næss
PI Affiliation
Centre for Applied Research at NHH (SNF)
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Additional Trial Information

Status
Completed
Start date
2021-05-01
End date
2021-10-31
Keywords
Behavior, Finance & Microfinance
Additional Keywords
JEL code(s)
G50, D91, D83
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We conduct field experiments with retail investors recruited from a social trading platform. In our main experiment, we first elicit beliefs about the returns to active investing. We then generate exogenous variation in beliefs by providing treated respondents with information about index funds historically outperforming active funds. Four months after the experiment, we collect administrative data on portfolio allocations.
External Link(s)

Registration Citation

Citation
Haaland, Ingar and Ole-Andreas Elvik Næss. 2023. "Misperceived Returns to Active Investing." AEA RCT Registry. January 23. https://doi.org/10.1257/rct.10780-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
We conduct field experiments with retail investors recruited from a social trading platform. In our main experiment, we first elicit beliefs about the returns to active investing. We then generate exogenous variation in beliefs by providing treated respondents with information about index funds historically outperforming active funds.
Intervention Start Date
2021-05-01
Intervention End Date
2021-10-31

Primary Outcomes

Primary Outcomes (end points)
Passive share in the portfolio
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Beliefs about whether index funds will outperform active funds in the future, beliefs about own ability to identify superior active funds, beliefs about own ability to beat the market by picking individual stocks, passive share intentions
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Treated respondents are 17.8 percentage points more likely to believe that index funds will outperform active funds in the future. Four months after the experiment, we collect administrative data on portfolio allocations. Treated respondents increase the index fund shares of their portfolios by 4.4 percentage points (37.7%) relative to the control group.
Experimental Design Details
Randomization Method
Randomization in Qualtrics
Randomization Unit
Treatment and control group
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
2 treatments
Sample size: planned number of observations
588
Sample size (or number of clusters) by treatment arms
294
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials