Stock Market Experiment on Investor Risk Behavior in Bangladesh

Project Background

Rising market news/trading prompts: Does frequent info improve or distort investor portfolios? Myopic loss aversion (MLA)—loss aversion + short-term accounting—predicts underinvestment in risky assets from frequent checks, explaining equity premium puzzle; evidence mostly lab-based in rich countries, not emerging markets/real stakes.
Framed field experiment + DSE brokerage data tests if lab MLA predicts 2-year trading/portfolio patterns for non-pro retail investors; examines info frequency's impact on risk-taking/behavior.

Project Scope & Reach

Dhaka Stock Exchange (DSE); 8 brokerages (Reliance, IIDFC, Lanka Motijheel, Lanka Uttara, PFI, Prime Bank, Mercantile, Modern); non-pro retail traders in financial training with partners/BIDS.

Key research partners

Centre for Development Economics and Sustainability (CDES)/Dept of Economics, Monash University; Bangladesh Institute of Development Studies (BIDS); University of Chicago Dept of Economics; Blockchain Innovation Hub, RMIT University; BIDS/brokerages (local field/data).

Funding & Support

Monash University; BIDS research support.

Roles of GDRI

Capacity Development and Intervention Design: Adapted content (e.g., IRI lessons, IVR scripts, FIES questions) to local context; contributed to sampling, tools, ethical procedures.
Field Implementation and Community Engagement: Listing villages/households, recruiting/training enumerators, baseline/follow-up surveys (phone/in-person), troubleshooting issues.
Data Management, Cleaning, and Analysis: Managed call logs/fieldwork, ensured data quality, cleaning/preparing datasets, supporting analysis.