eprintid: 33830 rev_number: 18 eprint_status: archive userid: 3114 dir: disk0/00/03/38/30 datestamp: 2023-09-22 14:14:00 lastmod: 2023-09-27 07:41:07 status_changed: 2023-09-22 14:14:00 type: workingPaper metadata_visibility: show creators_name: Lambrecht, Marco creators_name: Oechssler, Jörg creators_name: Weidenholzer, Simon title: On the benefits of robo-advice in financial markets subjects: ddc-330 divisions: i-181000 keywords: algorithmic trading, experiment, financial markets abstract: Robo-advisors are novel tools in financial markets that provide investors with low-cost financial advice, usually based on individual characteristics like risk attitudes. In a portfolio choice experiment running over 10 weeks, we study how much investors benefit from robo advice. We also study whether robos increase financial market participation. The treatments are whether investors just receive advice, have a robo making all decisions for them, or have to trade on their own. We find no effect on initial market participation. But robos help investors to avoid mistakes, make rebalancing more frequent, and overall yield portfolios much closer to the utility maximizing ones. Robo-advisors that implement the recommendations by default do significantly better than those that just give advice. date: 2023-09-13 id_scheme: DOI id_number: 10.11588/heidok.00033830 schriftenreihe_cluster_id: sr-3 schriftenreihe_order: 0734 ppn_swb: 186034416X own_urn: urn:nbn:de:bsz:16-heidok-338303 language: eng bibsort: LAMBRECHTMONTHEBENEF20230913 full_text_status: public series: Discussion Paper Series / University of Heidelberg, Department of Economics volume: 0734 place_of_pub: Heidelberg pages: 49 citation: Lambrecht, Marco ; Oechssler, Jörg ; Weidenholzer, Simon (2023) On the benefits of robo-advice in financial markets. [Working paper] document_url: https://archiv.ub.uni-heidelberg.de/volltextserver/33830/1/Lambrecht_et_al_2023_dp734.pdf