Experimental Design Details
At the outset of the experiment, participants are asked to recall their experiences regarding the stock market. Questions entail answers both in free form text as well as multiple choice questions. In the control conditions (IV, V, VI), this part is omitted and participants go straight to the steps described below.
Following this, participants will be randomly assigned to an experimental condition.
Condition I: No information is given.
Condition II: participants are given real prices and some information regarding the asset they later will be asked to invest or not.
Condition III: participants are given information on the asset they will later be asked to invest or not. Contrary to condition II, however, the information disclosed is vague and therefore it will be open for interpretation.
Condition IV: Participants are not only not given any information but they are also not primed to think about their existing memories. Therefore, for these participants no elicitation of memories is performed.
Condition V: same information as Condition II but no memory elicitation (like in Condition IV).
Condition VI: same information as Condition III but no memory elicitation (like in Condition IV).
After this, participants are given the current price of a specific stock (stock S, price P) and are asked to assess the probability with which they think that the stock will increase in price by X (P+X), will decrease in price by Y (P-Y), or will stay in the price range [P-Y;P+X] after 14 days. This elicitation is payoff relevant and is incentivized following Hossain and Okui (2013).
Thus, participants will be given an amount of money and are asked what percentage of it they want to keep and how much they want to invest in stock S. They win 2.5 times the amount invested if the price of the S after 14 days is above a given price PI. Otherwise, they lose the investment.
The next page of the experiment will ask participants how confident they are about their beliefs about the stock S price in the future, and that the amount invested in the stock will yield a positive return. Also, for those participants in conditions II-III-V-VI we will ask them whether they consider the information provided to them prior the investment decision useful or not.
In the last part of the experiment, participants will perform a simple financial literacy questionnaire.
This questionnaire consists of "Big Three" Financial literacy questions. Moreover, we ask participants their age and gender, whether they have received formal financial training and a self-assessment of their financial knowledege. Finally, we ask a general willingness to take risks question (Dohmen et al., 2011).