Investor confidence in delegated decisions

Last registered on November 08, 2022


Trial Information

General Information

Investor confidence in delegated decisions
Initial registration date
November 08, 2022

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
November 08, 2022, 3:59 PM EST

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


Primary Investigator


Other Primary Investigator(s)

PI Affiliation
Bocconi University

Additional Trial Information

In development
Start date
End date
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
We employ a series of laboratory experiments in the context of delegated investments to make three key contributions. First, we explore belief patterns when investment decisions are delegated. Second, we investigate underlying mechanisms. Third, we explore how learning in a delegated setting affects subsequent investor behavior.
External Link(s)

Registration Citation

Gödker, Katrin and Marten Laudi. 2022. "Investor confidence in delegated decisions." AEA RCT Registry. November 08.
Experimental Details


We employ a between-subject design. The experimental setting features six risky assets with equal purchase prices. Participants are invested in the asset for 10 periods. In a pre-study, we sample participants, who we call asset managers throughout. In the main study, participants are randomly allocated to one of five treatments.

1. TREATMENT CHOICE: Participants select one asset they invest in.
2. TREATMENT RANDOM DELEGATION: Each participant gets an asset manager randomly allocated. The asset manager selects one asset to invest in on behalf of the participant.
3. TREATMENT CHOICE DELEGATION: Each participant selects her own asset manager based on noisy information about the quality of the manager. The chosen asset manager selects one asset to invest in on behalf of the participant.
4. TREATMENT OBSERVED DELEGATION: We show each participants the price path of an asset that was selected by a randomly drawn asset manager for another participant.
5. TREATMENT RANDOM: Participants are randomly assigned an asset they are invested in.
Intervention Start Date
Intervention End Date

Primary Outcomes

Primary Outcomes (end points)
Participants’ beliefs about the fundamental value of stocks that they hold.
Primary Outcomes (explanation)
Does delegation influence belief formation about stock quality? We calculate the difference between participants’ estimate of the fundamental quality of their stock and the normative Bayesian posterior. We compare deviations from normative posteriors between CHOICE, CHOICE DELEGATION, RANDOM DELEGATION, and RANDOM. We expect investors to extrapolate and hence update beliefs more strongly to recent price movements when they have selected stocks themselves, compared to when it was selected by an asset manager.

Secondary Outcomes

Secondary Outcomes (end points)
Beliefs about asset managers; Subsequent behavior
Secondary Outcomes (explanation)
1. Beliefs about asset managers: In our study, asset managers can exert costly effort to increase their clients’ payoff. Per default, each asset manager does not have any informative signals about the quality of the available assets. Yet, the asset manager can buy historical information, which costs a fixed amount per additional signal (i.e., additional price level). Among participants in the delegation treatments, we elicit beliefs about how many previous price levels their asset managers have purchased. We compare these beliefs between delegation treatments and expect clients to form more positive beliefs when they have selected an asset manager themselves.

2. Subsequent behavior:
2.1. How do investor beliefs drive risk taking? The first behavioral outcome variable is the level of risk taking. After the first block, participants have the option to invest again in the same asset they were invested in before. They are invested for the next 10 investment periods of the second block. However, this time they can decide how much (from 0% to 100%) of their experimental endowment they want to allocate to the asset. The amount not invested in the risky asset will be invested in a risk-free asset with a small but certain return after 10 periods.

2.2. How do investor beliefs drive switching? The second behavioral outcome variable is switching behavior. After the first block, participants invest again for the next 10 investment periods of the second block. Depending on the treatment group, participants can switch their manager or switch the asset they were invested in. Participants in the RANDOM DELEGATION and CHOICE DELEGATION treatment can decide to either keep their asset manager of block 1 or to switch and get a new manager randomly allocated (RANDOM DELEGATION) / select a new manager (CHOICE DELEGATION). Participants in the RANDOM and CHOICE treatment can decide to either invest in the asset they were invested in before (block 1) or to switch and get a new asset randomly allocated (RANDOM) / select a new asset (CHOICE).

Experimental Design

Experimental Design
Between-subject design. Lab experiment.
Experimental Design Details
1. First block (belief elicitation)
Our study consists of two blocks. In each block, participants are invested in a risky asset for 10 periods (except of subjects in the OBSERVED DELEGATION treatment, who observe outcomes of a risky asset they do not hold). During the first block, each participant views a sequence of the asset’s outcomes, which are signals about the fundamental quality of the asset. After each new signal, we elicit her belief about the fundamental quality of the asset as well as about her asset manager’s effort (if the participant is in a DELEGATION treatment). That is, after each period, we elicit participant’s estimate of:
• The fundamental quality of the asset (ranges between 0.1 and 0.9) and
• The effort of the asset manager, i.e., what they think how many previous price levels the asset manager bought (between 0 and 5). We provide participants with the information about the average number of price periods bought by all asset managers in the experiment.

2. Second block (investor behavior)
We use a second block to measure two behavioral outcomes and test whether a potentially biased learning process during the first block affects subsequent behavior. Note, however, that subjects of treatment OBSERVED DELEGATION do not take part in the second block of the study. After observing the asset’s outcomes in block 1 we randomly give subjects one of the two choices below:
• To increase or decrease the amount invested in the asset they hold [RISK TAKING]
• To choose between sticking to the asset (treatments CHOICE and RANDOM) or asset manager (treatments CHOICE DELEGATION and RANDOM DELEGATION) from block 1 and investing in a new asset or via a new asset manager [SWITCHING]
These decisions are implemented in the second block. For each participant we only measure and implement one of the two decisions.
Randomization Method
Block randomization
Randomization Unit
Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters
30 asset managers; at least 50 per treatment arm, depending on budget constraints.
Sample size: planned number of observations
30 asset managers; at least 50 per treatment arm, depending on budget constraints.
Sample size (or number of clusters) by treatment arms
30 asset managers; at least 50 per treatment arm, depending on budget constraints.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Institutional Review Boards (IRBs)

IRB Name
Ethical Review Committee Inner City Faculties at Maastricht University
IRB Approval Date
IRB Approval Number


Post Trial Information

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Data Collection Complete
Data Publication

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Program Files

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Reports, Papers & Other Materials

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Reports & Other Materials