Informed Consent

What is this study about?

This study examines how thinking styles may catalyze certain investment decision-making and common behavioral biases. Your participation will help me understand factors that protect against poor investment choices.

What will I do?

You’ll complete a 15–20 minute online survey consisting of: demographic questions, three cognitive reflection questions, three financial literacy questions, and a trading simulation with twelve investment scenarios using virtual money.

Risks and Benefits

Risks are minimal (minor fatigue/discomfort from challenging questions). No real money is involved. You’ll receive a debrief of your results afterwards and entered into a raffle for one of four $25 Amazon gift cards.

Privacy

Your responses are confidential. Data will be stored securely and reported only in aggregate form. Your email (for raffle only) will be stored separately from your responses and deleted after winners are selected.

Voluntary Participation

Participation is optional. You may withdraw at any time without penalty. If you have any questions, contact me at [email protected]

Your Consent

By confirming below, you agree that you are 18 years of age or older, have read this information, and voluntarily agree to participate.

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Section I. Demographics

This section consists of two questions to assess the participant demographic .

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What is your age? ^*

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What is your highest level of education? ^*

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How many years of experience do you have with investing? ^*

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Do you currently own stocks, mutual funds, or other investments? ^*

Yes.

No.

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Section II. Cognitive Reflection Test (CRT-3)

This section examines your propensity for "cognitive reflection".
Answer the following three questions to the best of your abilities.

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A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball.How much does the ball cost? 👇 ^*

10¢

5¢

15¢

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If it takes 5 machines 5 minutes to make 5 widgets, how long would it take 100 machines to make 100 widgets?👇 ^*

5 minutes

10 minutes

100 minutes

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In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of the lake?👇 ^*

47 days

67 days

24 days

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Section III. The "Big Three"

This section is to determine the breadth of your financial literacy.
Answer the following three questions to the best of your ability.

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Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?👇 ^*

Less than $102

More than $102

Exactly $102

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Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?👇 ^*

Less than today

More than today

Exactly the same

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Please tell me whether this statement is true or false. “Buying a single company’s stock usually provides a safer return than a stock mutual fund.”👇 ^*

True

False

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Section IV. Trading Decision Scenarios

This section presents nine stock market scenarios. For each scenario, you will view price charts and market conditions, then indicate your trading decision (e.g., long, short, hold).
Please select your preferred action.

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What do you do with your stock positions? ^*

It's August 5, 2024. The S&P 500 has dropped 6% in three days. Headlines: "MARKET MELTDOWN." Your trading group shows panic—78% of investors have sold or plan to sell today. Financial advisors recommend moving to cash.

However, U.S. fundamentals remain strong—solid GDP, low unemployment, good earnings. The drop stems from technical factors in foreign exchange markets.

Hold current positions

Sell 50% as a compromise

Buy more at discounted prices

Sell most/all stocks to protect capital

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What do you do with your tech stock positions? ^*

It's August 19, 2025. The NASDAQ-100 has dropped 1.4% today (worst day since April). Headlines: "TECH SELLOFF ACCELERATES" and "300% Chip Tariffs Floated." Your trading group shows panic—83% of retail traders are selling tech positions. Financial advisors recommend rotating to defensive sectors.

However, tech earnings remain strong with AI adoption accelerating. The tariff threat has no implementation timeline. Economic fundamentals remain solid with strong GDP growth.

Buy more at discounted prices

Sell most/all to protect capital

Reduce by 50% as compromise

Hold current positions

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What do you do with your stock positions? ^*

It's April 7, 2025. The Dow Jones has crashed 14% in one week (from 42,300 to 36,500) following Trump's "Liberation Day" tariffs. Headlines: "WORST CRASH SINCE 2020" and "$6.6 Trillion Wiped Out." Your trading group shows mass panic—89% of investors have moved to cash or defensive positions. Financial advisors warn of 60% recession risk.

However, corporate earnings remain strong, unemployment is at 4%, and the Fed may cut rates to support the economy. Many analysts believe tariff rates will be negotiated down within 90 days.

Buy more at discounted prices

Reduce by 50% as compromise

Hold current positions

Sell most/all to protect capital

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Your $10,000 stock portfolio has declined to $9,200 (8% loss). A financial analyst offers you two options: ^*

Option A: Sell now and realize a certain $800 loss

Option B: Hold the position with a 50% chance it recovers fully to $10,000 or a 50% chance it drops further to $8,500

Option B; Hold and take the gamble

Option A; Sell now and accept the $800 loss

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You purchased tech stocks at $5,000 six months ago. They're now worth $4,000 (20% loss). Your research shows the company's fundamentals have weakened significantly. A broker presents two options: ^*

Option A: Sell immediately and lock in the $1,000 loss to reinvest elsewhere

Option B: Hold for 6 more months with a 40% chance of breaking even at $5,000 or 60% chance of dropping to $3,200

Option B; Hold and hope for recovery

Option A; Sell now and accept the loss

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Your diversified portfolio of $20,000 has dropped to $18,000 (10% loss) due to market volatility. Economic data remains stable. You have two choices: ^*

Option A: Sell everything now, accept the $2,000 loss, and move to bonds earning guaranteed 3% annually

Option B: Stay invested with a 50% chance the market recovers to $20,000 within a year or 50% chance it falls to $17,000

Option B; Stay invested and accept the risk

Option A; Sell and move to safe bonds

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Compared to other individual investors with similar experience and investment capital, how would you rate your ability to pick profitable investments? ^*

Top 25% (better than 75% of similar investors)

Top 10% (better than 90% of similar investors)

Top 50% (better than 50% of similar investors)

Bottom 50% (worse than 50% of similar investors)

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The S&P 500 is currently at 5,800. Based on historical data, the average annual return is approximately 10% with significant volatility.One year from today, what range are you 90% confident will contain the actual S&P 500 closing value? ^*

Please provide your estimate:

Lower bound:

Upper bound:

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When you make investment decisions to buy individual stocks or funds, what percentage of your picks are profitable after 6 months? ^*

I don't track or don't invest in individual picks

50-69% of my picks are profitable

Less than 30% of my picks are profitable

70-100% of my picks are profitable

30-49% of my picks are profitable

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Thank you for completing the study!

To enter the raffle for one of four $25 Amazon gift cards, please provide your email address below.

Email

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All done! Now here's the debrief:

Purpose - This research examined how cognitive reflection ability influences susceptibility to three behavioral biases in trading decisions:

I. Herd Bias - Tendency to follow what others are doing
II. Loss Aversion - Holding losing investments too long
III. Overconfidence - Overestimating accuracy of predictions

Your responses help me understand individual differences in financial decision-making and will be sent directly to your email after research has been conducted.
All data remains anonymous.

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Your participation is greatly appreciated!

Informed Consent

Section I. Demographics

Section II. Cognitive Reflection Test (CRT-3)

Section III. The "Big Three"

Section IV. Trading Decision Scenarios

All done! Now here's the debrief: