Trading behavior and profits in experimental asset markets with asymmetric information

Thomas Stöckl and Michael Kirchler

Journal of Behavioral and Experimental Finance, 2014, vol. 2, issue C, 18-30

Abstract: We study trading behavior and its profitability in experimental asset markets with asymmetrically informed traders. We find that insiders make most of their profits from trades which are initiated by their limit orders. The average informed lose most with market orders and their losses are highest when they pick up insiders’ limit orders. Uninformed traders act as liquidity providers. They place the highest number of limit orders and end up with the market return.

Keywords: Asymmetric information; Liquidity; Trading behavior; Limit order markets; Experimental finance (search for similar items in EconPapers)
JEL-codes: D03 G12 G14 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:2:y:2014:i:c:p:18-30

DOI: 10.1016/j.jbef.2014.03.001

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