Presenter: Antonia Grohmann, AU

Title: The Effect of Self-Control and Financial Literacy on Impulsive Borrowing

Abstract: This paper examines the effect of reduced self-control on impulsive borrowing for consumption using a laboratory experiment and a survey. In the experiment, we manipulate self-control using an ego depletion task, which we show to be effective. Following the ego depletion task, participants can anonymously buy hot drinks on credit. Treated participants are more likely to borrow than the control group, however, these average effects are not significant. In further analysis, we show that treated individuals that have low financial literacy are more likely to borrow impulsively than the treated that have high financial literacy. In complementary survey evidence from the German SOEP Innovation Sample, we show that people with low self-control have more problems with repayment of consumer debt than those with higher self-control. This relationships is, in line with the experimental results, weaker for individuals with high financial

Presenter: Olga Balakina, AU

Title: How Fat are the Fingers? Investor Mistakes and Market Efficiency

Abstract: Automated trading has changed financial markets profoundly over the last two decades. This project proposes a novel identification strategy that examines market reaction to non- informative events over time in order to understand whether automated trading has improved market efficiency. We begin by estimating the impact that investor confusion between stocks with similar company names and/or tickers has on stock returns and trading volumes. The shocks to the stock price of the company with a similar name are non-informative and efficient markets should arbitrage them away. We proceed to examine whether the rise of automated trading is associated with quicker price discovery, and whether automated trading limits the impact of investor mistakes on stock markets.

Organizers: Stefan Hirth and Anders Merrild Posselt