Faculty News & Research

Playing Games with Stock Trades Has Substantial Upside

The recent rise of a gaming-style approach to the stock market is a good thing — both for the gamers themselves and the overall market, according to Ross School of Business Professor Erik Gordon.

Writing in Fortune, Gordon argues that this “gamification” serves to create much-needed engagement of younger generations with the market. “If these generations aren’t interested in the market, the highly valued individual investor base will die out. Literally,” Gordon writes.

“Fortunately, the younger generations themselves came up with a stock market game that engages them,” Gordon explains. “It’s a combination of some old games, played with today’s app technology and zero commissions. Their game is to jump on hyped, fad stocks and ride the momentum.”

In the essay, Gordon considers and responds to several common objections to the gaming approach, and then notes: “Gamers learn by playing. They learn that sometimes it is easy to make money, but not all of the time. They learn how to handle the rush of making money and the pain of losing real money. You can’t understand that pain by studying risk or looking at losses from paper trades.”
 

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Erik Gordon
  • Clinical Assistant Professor