Investment Risk, Information Disclosure, and Market trust—Based on trust game experiment research

Abstract

This paper studies the influence of investment risk and information disclosure on market trust by extending the classic trust game experiment. First of all, the investment trust experiment with no investment risk and investment risk was conducted respectively，then by introducing investment-related information study the game problem of market investment trust. The results show that, the uncertainty risk of investment returns will significantly reduce the level of mutual trust among participants in the investment market and Inhibit investment. At the same time, the impact of such income uncertainty is heterogeneous. In the case of higher income level, risk has less inhibitory effect on investment, while in the case of lower income level, risk has greater inhibitory effect on investment. Investment-related information disclosure can improve market trust, and more importantly, it can effectively reduce the adverse impact of investment risks on market trust. Therefore, in the process of continuous improvement of the capital market, the establishment of a standardized information disclosure mechanism and the reduction of information asymmetry can reduce the impact of risks on the market and give play to the function of the capital market in the efficient allocation of funds.