We run a randomized online experiment to study the impact of trading platform gamification on retail traders' risk taking. We recruit 605 participants from four countries, two-thirds of them reporting self-directed trading experience, to trade a virtual asset on an experimental platform. The...

We study a simple model of market making in which high-frequency market makers can cancel limit orders quickly after receiving an adverse signal. The resulting winner's curse induces low-frequency market makers to widen bid-ask spreads. Liquidity in the market may deteriorate unless...

We study implications of asymmetries in both preferences and fundamentals for put option demand across investors and the resulting market behavior. A heterogenous-agent model populated by investors with asymmetric preferences alongside standard risk-averse agents rationalizes the size and the...