Decision Implementation Under Uncertainty: Trading Style, Individual Differences, and Short-Horizon Performance in a Market Simulation

We examine whether short-horizon trading performance is explained primarily by trading style rather than by individual characteristics. We analyze data from a 4-hour stock-market simulation with 133 second-year undergraduate students trading CAC40 stocks on a stock market platform, under continuous real-time rank feedback and a performance-academic incentive. Performance is measured as the return on the final portfolio value. Trading style is captured by the activity, cash exposure, position sizing, and portfolio volatility. Individual predictors include age, sex, self-reported market experience, and the Big Five (OCEAN). We estimated OLS models and relied on HC3 heteroskedasticity-consistent standard errors when heteroskedasticity was suggested by standard diagnostics. We find that trading style accounts for most of the explainable variation in performance (R ² = 0.497), whereas individual variables alone explain substantially less (R ² = 0.168). Adding dispositional variables to the trading-style model produces a small gain (ΔR ² = 0.047). Activity exhibits a U-shaped association with performance, consistent with two behavioral regimes (reactive overtrading versus disciplined trading style). Higher average cash holdings and larger trade sizes are associated with lower performance, while portfolio volatility shows no independent relationship with performance. Among individual variables, age and Openness are significantly associated with performance. Our findings align with an implementation-based perspective whereby individual differences become economically relevant primarily through their influence on trading style.