Do Conversations Nudge Investment Decisions?

Last registered on August 27, 2022


Trial Information

General Information

Do Conversations Nudge Investment Decisions?
Initial registration date
April 21, 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
April 28, 2022, 5:50 PM EDT

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

Last updated
August 27, 2022, 1:45 AM EDT

Last updated is the most recent time when changes to the trial's registration were published.



Primary Investigator

Management Development Institute Gurgaon

Other Primary Investigator(s)

PI Affiliation
Ahmedabad University

Additional Trial Information

Start date
End date
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
2020 marked a sharp rise in individual investors in the risky investment market like equity and cryptocurrency. The Nature versus Nurture debate from psychology suggests that factors contributing to this change may range from individual-specific factors to those concerning individuals' social environment. Peer effect is one such channel in social environment that affects an individual's decisions. While peers affect us in several contexts and in different ways, it is not clear whether the risk-attribute of our conversations with peers affect our investment decisions. In this paper, we use a lab experiment to study whether and how such conversations with peers, varying in their risk-attributes, affect an individual's investment decision.
External Link(s)

Registration Citation

Arora, Puneet and Durga Nagori. 2022. "Do Conversations Nudge Investment Decisions?." AEA RCT Registry. August 27.
Sponsors & Partners


Experimental Details


3 kinds of conversations in a group to be conducted to prime different risk-attitudes
Intervention Start Date
Intervention End Date

Primary Outcomes

Primary Outcomes (end points)
When invested in risky assets (1/0); average investment in risky-assets; average investment in risky-assets only for those who invested in risky-assets
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Subjects will start with a bonding task, move on to conversations randomly assigned to prime risk-attitudes, subsequently perform Holt and Laury risk-elicitation task and finally perform an asset-allocation task to see whether their investment approach corresponds to the conversations they had as the intervention.
Experimental Design Details
For both Task 1 and Task 2 below, we will assign a moderator who will conduct these activities and ensure that they go as per the plan. These moderators will keep switching between different treatment groups in different experimental sessions so as to control for the moderator effect in our estimates of interest.

Task 1: (Creating peer-groups - 5 minutes task)
In this task, subjects randomly assigned to different groups of 5 students each will play “catch-catch” with the ball. The person who catches the ball is supposed to tell everyone their name, their program of study at the university, and the name of a movie that they would recommend others in the group to watch.

Task 2: (Intervention- Peer-conversation for 10 minutes)
In this task, each student would be randomly assigned to only one of the Treatment 1, Treatment 2 or Control discussions

Treatment 1: (Risk-Loving discussion) Imagine that you are an investor in the stock market that has been on a steep rise in the recent past. Suppose as an investor in this market, you had invested Rs. 100,000 last year and within a year, it gave you a return of 70%, i.e., your current total invested amount stands at Rs. 1,70,000. Discuss your feelings – the fun, thrills and other beneficial consequences of investing in such a booming stock market. You may use the following words in your discussion: adventurous, daring, enterprising, risk-seeking

Treatment 2: (Risk-Averse discussion) Imagine that you are an investor in the stock market that has been continuously declining in the recent past. Suppose as an investor in this market, you had invested Rs. 100,000 last year and within a year, it gave you a loss of -50%, i.e., your current total invested amount stands at Rs. 50,000 only. Discuss your feelings – the fear, anxiety and other adverse consequences of investing in such a sharply falling stock market. You may use the following words in your discussion: careful, anxious, responsible, worried.

Control: Neutral discussion University recently inaugurated the Student Centre building. Discuss the food court, talking about various restaurants in it and your favourite item on the menu. In which area of that building, do you spend most of your time and why? What one more thing do you wish was also there in the student centre?

While Task 1 and Task 2 above will be conducted in separate rooms/spaces for each group, they will all move to a common room afterwards for the next 2 tasks. Task 3 and 4 are to be performed on subject's own laptops which they would be required to bring. For these tasks, subjects are not allowed to interact with any other group member.

Task 3: Risk-elicitation task
In this task, subjects will respond to a 10-round Holt and Laury lottery design to elicit their risk-attitudes to see whether they change post their respective conversations. Pay-one-random payment protocol will be used at the end of the experiment to pay them for their decision.

Task 4: Asset Allocation Task
In this task, subjects will see 14 rounds of asset allocation decision-tasks (no of rounds not informed to students to prevent end-of-the-world effect). In each round, subjects will see 5 investment options. For each investment option, we provide them information on their average yearly return (%), annual standard deviation (%) which is an indicator of volatility or risk experienced in the past, and the risk type of that investment option. A higher standard deviation implies a higher risk profile of the investment option.

For each task, subjects will be given an amount of 20000 Experimental Units (EU), where 100 EU = 1 INR. In each task, they are required to optimally allocate 20000 EU money between the 5 investment options. They may choose to divide them in any proportion between different investment options or even invest it all in one option only if they so prefer. Their total investment in these options must sum to 20000 EU exactly.

Additionally, we also use our experimental design to study whether individuals investment depends on the:
(a) default investment option (by assigning 20000EU to either the safest or the riskiest asset at the beginning)
(b) the time frame of returns presented (by presenting them some asset-allocation frames where returns presented are only for last 1 year or for last 1 and 5 years
(c) the anchoring theory (where subjects anchor their investment to returns or to volatility of the instruments, disregarding the rest of the information.

We will also study whether peer-conversations cause differential effects on investment across the dimensions of default and time-frame, by using interaction of conversation with default and time-frame in our empirical model.

Subjects are informed that at the end of the experiment, we will randomly pick slips from an urn to pick one of these several decision tasks. We will subsequently pick slips from other urns to determine the returns on each investment instrument. Their earnings will be determined based on their investment in each instrument and the respective returns drawn for each instrument.

Subjects' total earnings will be a fixed fee of INR 50, their earning on risk-elicitation and asset allocation tasks. The total will range between INR 171 and INR 455.
Randomization Method
Randomization done in Stata over students who pre-registered for participating in the study
Randomization Unit
Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters
Sample size: planned number of observations
3150 (=225 students with each performing 14 asset allocation tasks)
Sample size (or number of clusters) by treatment arms
75 Treatment 1, 75 Treatment 2, and 75 Control
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Institutional Review Boards (IRBs)

IRB Name
University Research Board, Ahmedabad University
IRB Approval Date
IRB Approval Number


Post Trial Information

Study Withdrawal

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Is the intervention completed?
Intervention Completion Date
June 30, 2022, 12:00 +00:00
Data Collection Complete
Data Collection Completion Date
June 30, 2022, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
133 subjects (This is lower than the number of subjects planned for the experiment, which was 225. This is because the author had received a seed-grant from the university to conduct this experiment. The experiment with 133 subjects was completed in May 2022, and the rest of it was planned later when the students come back to the campus after their semester end exams. Meanwhile, the author had to resign and move to a different university, due to which the remaining grant could not be used for the experiment. We will thus report our results basis 133 subjects with whom the experiment was conducted.)
Was attrition correlated with treatment status?
Final Sample Size: Total Number of Observations
1862 observations (133 subjects and 14 decisions taken by each subject)
Final Sample Size (or Number of Clusters) by Treatment Arms
Treatment 1= 47 subjects, Treatment 2 = 41 subjects, and Control = 45 subjects
Data Publication

Data Publication

Is public data available?

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Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials