xDelia final report: emotion-centred financial decision making and learning

Peffer, Gilbert; Fenton-O'Creevy, Mark; Adam, Marc; Astor, Philipp; Cederholm, Henrik; Clough, Gill; Conole, Gráinne; Davies, Gareth; Eriksson, Jeanette; Gaved, Mark; Heuer, Stephan; Jerčić, Petar; Lindley, Craig; Todd Lins, Jeffrey; van Overveld, Mark; Scanlon, Eileen; Schaaff, Kristina and Smidts, Ale (2012). xDelia final report: emotion-centred financial decision making and learning. Open University, CIMNE, Milton Keynes UK.

Abstract

xDelia is a 3-year pan-European project building on the knowledge, skills, and competences of seven partner organisations from a variety of research disciplines and from business. The principal objective of xDelia is to develop technology-enhanced learning approaches that help improve the financial decision making of investors who trade frequently using an electronic trading platform. We focus on emotions, and how they affect maladaptive decision biases and trading performance. Our earlier field work with traders has shown that the development of emotion regulation skills is a key facet of trader expertise. For that reason we consider expert traders our benchmark for adaptive behaviour rather than normative rationality. Our goal is to provide investors with the tools and techniques to develop greater self-awareness of internal states, increase their ability to reflect critically on emotion-informed choices, develop emotion management skills, and support the transfer of these skills to the real-world practice setting of financial trading.

This report provides a comprehensive overview of what xDelia is about and what we have achieved over the life of the project. In the sections that follow, we explain the decision problems investors are faced with in a fast paced environment and the limitations of traditional approaches to reduce cognitive errors; introduce an alternative, technology-enhanced learning approach of diagnosis and feedback, skill development, and transfer; describe the learning intervention comprising twelve autonomous learning elements that we have developed; and present evidence from thirty-five studies we have conducted on learning effects and stakeholder acceptance.

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