Investor rationality and their trading decisions: Experimental Approach.

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We created a web-based artificial stock market and observed how participants of the market behave in a volatile market condition. Each one of the participants is given 5000 YEN endowment by the experimenter and paid the 5000 YEN times the return of the trade at the end of the test. They are required to take the Cognitive Reflection Test proposed by Fredrick (2006) before starting their trading activity. CRT is known to have high correlation with IQ test. We found higher the CRT score, less likely the participant is subject to behavioral biases.