In this study, there are two distinct roles, each assigned to one participant: an investor and
a (commercial) bank. You have been assigned the role of the
investor.
Your task is to set up an investment savings plan that runs for 6 periods. In each period, you
receive a disposable income of
100 ECU
(ECU = Experimental Currency Unit). For payment, 100 ECU correspond to £0.25.
You will make two decisions in this study:
First, you decide how much of the 100 ECU per period to allocate to a fictitious index fund investment.
The remaining amount is automatically placed in a fictitious savings account.
You make this decision only once at the beginning of the study, and the same allocation is applied in all 6 periods.
Second, after you have made this allocation decision, you choose the index fund provider through which
your index fund investment will be made. You make this decision only once, and the same provider
is used in all 6 periods.
At this stage, the bank provides a chatbot that assists you in making your choice; that is, an AI-based chatbot
that offers advice.
Investment options
You can allocate your disposable income of 100 ECU per period between:
Index fund investment: The fund tracks the Experimental Global Equity (EGE) Index,
a diversified index representing a portfolio of fictitious international stocks.
Savings account: Money kept in the savings account earns no interest.
In each period, the value of the EGE Index either
increases by 30% with probability 70%, or
decreases by 10% with probability 30%.
These returns apply in each period to the total amount invested in the index fund at that time.
Money invested in earlier periods remains invested until the end of period 6.
These returns are therefore compounded over time.
Index fund providers and fees
You cannot invest in the EGE Index directly. Instead, you invest through an index fund provider
that offers an index fund tracking the EGE Index.
Each provider charges fees for its services:
Order commission: A fixed fee charged each time you invest in the index fund.
This fee is deducted from the amount you invest in that period (between 2 and 6 ECU).
Management fee: A percentage fee charged on the total value of your index fund investment.
The management fee is deducted once, after the last period, from the final value of your index fund investment (between 3% and 9%).
You will learn the exact fee structure of the available providers after you decide how much to allocate to the index fund investment.
When choosing an index fund provider, you may request advice from the chatbot provided by your bank.
Payment
At the end of period 6, you receive the total final value of the savings account and the index fund investment.
This total determines your bonus payment in this study.
The final amount is converted from ECU into pounds, using the exchange rate 100 ECU = £0.25.
The participant assigned the role of your bank receives a bonus payment, the size of which depends on your choice of
fund provider.
{{ elif player.role_type == "bank" }}
In this study, there are two distinct roles, each assigned to one participant: an investor and
a (commercial) bank. You have been assigned the role of the
bank.
You do not make any decisions yourself, and you do not communicate with the investor. However, you may receive a
bonus payment depending on the investor's decisions.
The investor can set up an investment savings plan that runs for 6 periods. In each period, the investor
receives a disposable income of
100 ECU
(ECU = Experimental Currency Unit). In this study, all monetary amounts are stated in ECU.
For payment, 100 ECU correspond to £0.25.
The investor will make two decisions in this study:
First, the investor decides how much of the 100 ECU per period to allocate to a fictitious index fund investment.
The remaining amount is automatically placed in a fictitious savings account.
They make this decision only once at the beginning of the study, and the same allocation is applied in all 6 periods.
Second, after the investor has made that allocation decision, they choose the index fund provider through which
the index fund investment will be made. They make this decision only once, and the same provider
is used in all 6 periods.
At this stage, the bank provides the investor with a chatbot that assists them in making the choice; that is,
an AI-based chatbot that offers advice.
Investment options
The investor can allocate their disposable income of 100 ECU per period between:
Index fund investment: The fund tracks the Experimental Global Equity (EGE) Index,
a diversified index representing a portfolio of fictitious international stocks.
Savings account: Money kept in the savings account earns no interest.
In each period, the value of the EGE Index either
increases by 30% with probability 70%, or
decreases by 10% with probability 30%.
These returns apply in each period to the total amount invested in the index fund at that time.
Money invested in earlier periods remains invested until the end of period 6.
These returns are therefore compounded over time.
Index fund providers and fees
The investor cannot invest in the EGE Index directly. Instead, they invest through an index fund provider
that offers an index fund tracking the EGE Index.
Each provider charges fees for its services:
Order commission: A fixed fee charged each time they invest in the index fund.
This fee is deducted from the amount they invest in that period (between 2 and 6 ECU).
Management fee: A percentage fee charged on the total value of the index fund investment.
The management fee is deducted once, after the last period, from the final value of the index fund investment (between 3% and 9%).
The exact fee structure of the available providers will be displayed after you were matched with the investor.
Payment
In addition to the fixed payment, you may earn an additional bonus.
Whether you receive this bonus depends on the investor’s choice of index fund provider.
The exact condition for receiving this bonus will be shown together with the provider information on the next pages.
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Comprehension questions
Please answer the following comprehension questions.
1. How often {{ if player.role_type == "investor" }}
do you decide
{{ elif player.role_type == "bank" }}
does the investor decide
{{ endif }}
how to allocate the 100 ECU between the savings account and the index investment?
{{ if player.role_type == "investor" }}
I make
{{ elif player.role_type == "bank" }}
The investor makes
{{ endif }}
a new allocation decision in each of the 6 periods.
{{ if player.role_type == "investor" }}
I make
{{ elif player.role_type == "bank" }}
The investor makes
{{ endif }}
one allocation decision at the beginning, and it is applied automatically in all periods.
{{ if player.role_type == "investor" }}
I decide
{{ elif player.role_type == "bank" }}
The investor decides
{{ endif }}
only in the final period how the money is allocated.
2. How much money
{{ if player.role_type == "investor" }}
do you have
{{ elif player.role_type == "bank" }}
does the investor have
{{ endif }}
available to allocate?
100 ECU in total for the entire study.
100 ECU in each period, for a total of 600 ECU over the 6 periods.