From the Poor to the Rich: Predatory Inclusion and the Robinhood App

Abstract

Purpose: Robinhood is a financial investment app that claims to "democratize finance" by connecting millennials and historically underserved populations to the stock market. We explore how Robinhood's user interface shapes investor behavior and the impact this behavior has on existing disparities in the stock market. Method: We use Sano-Franchini's (2018) method of critical interface analysis to examine three key microinteractions on the Robinhood platform: depositing and withdrawing funds, browsing, and trading stock. Results: Our analysis shows that Robinhood's user interface encourages users to think of themselves as informed investors but does not give them the knowledge or tools they need to invest successfully. A manufactured sense of urgency encourages users to overtrade on their portfolio, contributing to market volatility and diminishing returns over time. Conclusion: Our analysis considers the relationship between the interface, the user experience, and investment practices. As such, this paper helps readers recognize how technologies that promise to increase inclusion can actually exacerbate existing socioeconomic inequalities.