Electronic Theses and Dissertations

Date

2025

Document Type

Dissertation

Degree Name

Doctor of Philosophy

Department

Business Administration

Committee Chair

Konstantin Sokolov

Committee Member

David Kemme

Committee Member

Jan Hanousek

Committee Member

Konstantin Sokolov

Committee Member

Pankaj Jain

Abstract

This dissertation consists of three essays on Gamification, Innovation, and Cyber Security. The first essay investigates gamified stock trading. Gamification of stock trading is a novel practice by brokers to incorporate game-like features to increase clients’ engagement with trading. This study examines how the market reacts to the introduction of 142 gamification features in the mobile trading apps of 17 major U.S. brokers. I find that the gamification of trading can be viewed as a double-edged sword. It alters and worsens retail traders’ strategy by reducing their returns and increasing return volatility. However, it also reduces costs and risks for liquidity providers by making retail order flow less toxic, leading to a positive effect for the rest of the market. In the second essay, we explore securities exchange innovation. Securities markets continuously innovate to keep pace with technology. It is often debated if such innovation is beneficial, and which market participants capture the benefits. We contribute to this debate by examining the effects of a wide range of proprietary enhancements to the trading process introduced by the stock exchanges in the United States. Generally, exchange innovation is associated with improvements in liquidity and price efficiency, although the reduction in liquidity costs primarily benefits investors trading in small quantities. Institutional investors experience less favorable outcomes; while their trading costs remain unchanged, their market participation declines. The third essay discusses cybersecurity externalities. Theoretical literature debates whether a firm’s decision to invest in its own cybersecurity carries positive or negative implications for the security of its peers. We address this debate empirically and find that a $1M unexpected shock to a firm's cybersecurity expenditure makes its closest peer 25% more likely to become a target of a successful data breach. Peers typically respond by increasing their own cybersecurity spending, which leads to a higher likelihood of cybersecurity overinvestment.

Comments

Data is provided by the student.

Library Comment

Dissertation or thesis originally submitted to ProQuest.

Notes

Open Access

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