Conference Agenda

Session

Plen. pres. 2: Plenary presentation: "Prompting Participation: Digital Nudging to Reduce Investment Inertia"

Time:

Monday, 25/Aug/2025:

4:30pm - 5:00pm

Moderator: Bernard Yeung, NUS business school, Singapore

Location: Aida Conference hall

Meeting hall “Aida”, which can accommodate up to 180 people

Presentations

Prompting Participation: Digital Nudging to Reduce Investment Inertia

Prof. Xiaomin Guo³, Prof. yi Huang², Prof. qi sun⁴, Prof. Bernard Yeung¹

¹NUS business school, Singapore; ²Bank for International Settlements; ³Southern university of Science and Technology Business School; ⁴Shanghai University of Finance and Economics

Investing in capital markets (stocks, bonds, ETFs, and mutual funds, etc.) helps preserve and grow wealth. Yet participation remains low, particularly among older, less affluent, and less educated individuals. Barriers like costs, investment thresholds, volatility, and limited financial literacy discourage engagement. While digitalization has eased these frictions and allowed for free access to financial education, participation remains low, at 30% in the U.K., 15% in Japan, and under 10% in China and India

We hypothesize that behavioral inertia, passive avoidance of unfamiliar opportunities, contributes to this gap. To test whether digital nudges can mitigate it, we analyze a quasi-natural experiment on a major Chinese platform. Among 560,000 users with no investment records, we randomly selected 64,770 who received prompts promoting low thresholds and diversified products, and free education; a control group, matched via Coarsened Exact Matching, received none.

The initial response rate was 1.5%, rising to 23.6% after six prompts. Of first-time responders, 32% invested an average of CNY 1,989 (~US$277). In the following months, these users, including older, less educated, and lower-income ones, built diversified portfolios and consistently outperformed the control group in risk-adjusted returns. The results show that digital nudges can help overcome inertia and broaden financial inclusion.