This paper investigates how people’s forecasts about financial market are shaped by the environment .By recruiting 1385 subjects on WeChat, one of the largest social media, we conduct an online experiment of artificial investment games. In particular, we focus on the role of a costless pre-play communication. Our online experimental evidence shows that with information sharing, people’s forecasts tend to converge. However, communication does not necessarily lead to collective wisdom. In fact, the direction of the convergence may vary, so the collective forecast becomes less predictable. Meanwhile, we confirm that the forecasts reported in the costless pre-play communication are significantly and positively correlated with the investment decisions, which suggests that the forecasts are associated with subjects’ underlying beliefs. Our results thus suggest the concentration and unpredictability of individual beliefs when forecasts are shared.

 

This paper can be regarded as the first one of exploring the WeChat platform for experimental studies. This platform may allow us to further study related dynamic issues such as social learning and contagious manias in financial markets followed by a crash, in which the traditional experimental method in the laboratory with a very limited number of subjects appears to be almost infeasible. Our experiment via WeChat thus showcases a promising experimental approach to study massive-scale economic and financial systems.