More than $7.5 million (about €6 million) in fines for launching virtual "confetti" at investors: That is the penalty the American brokerage platform Robinhood paid in January 2024 in the United States. This put an end to legal action by the Massachusetts financial markets regulator, which accused Robinhood of making trading seem like a game with these digital rewards. The regulator found that this encouraged young and inexperienced customers to take on risky transactions.
Researchers refer to these features as digital engagement practices (DEP): animations that cover your screen with each completed transaction, or virtual trophies awarded for making a profit. In the United Kingdom, a study by the financial services regulator found that such rewards, inspired by video games, led investors to increase their purchase volumes by over 10 %.
A similar finding emerged from a study conducted in France by Marie-Hélène Broihanne, professor of finance at the University of Strasbourg. If investors received a bronze, silver, or gold cup each time they took more risks, they would continue to increase their risk-taking. The opposite also held true. "If those who save prudently are rewarded, they will continue to do so," Broihanne said, regretting that platforms use gaming "only to encourage further investment."
