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How do warnings affect retail demand for Bitcoin? Evidence from an international survey experiment

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  • Ebers, Axel
  • Thomsen, Stephan L.

Abstract

Bitcoin is associated with different risks. We conduct an information experiment in the four largest European economies to analyze the effects of specific warnings and information on retail investors’ demand for Bitcoin. Our results indicate that the impact is strongest when warnings point to privacy issues. Information on the lack of guarantees or on CO2 emissions only affects particular subgroups. Knowledge of broad public acceptance increases overall demand. Warnings can, therefore, effectively prevent extreme market events while avoiding the costs of stricter regulation. Effect heterogeneity implies that regulators should use specific information and different communication channels to reach relevant investors.

Suggested Citation

  • Ebers, Axel & Thomsen, Stephan L., 2021. "How do warnings affect retail demand for Bitcoin? Evidence from an international survey experiment," Journal of Behavioral and Experimental Finance, Elsevier, vol. 32(C).
    • Handle: RePEc:eee:beexfi:v:32:y:2021:i:c:s2214635021001118
    DOI: 10.1016/j.jbef.2021.100567
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    More about this item

    Keywords

    Survey experiment; Warnings; Bitcoin; Retail demand; Regulation; Cultural differences;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G40 - Financial Economics - - Behavioral Finance - - - General

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