Herding and Contrarian Behavior in Financial Markets: An Experimental Analysis

Andreas Park and Daniel Sgroi

No 269716, Economic Research Papers from University of Warwick - Department of Economics

Abstract: We analyze and confirm the existence and extent of rational informational herding and rational informational contrarianism in a financial market experiment, and compare and contrast these with equivalent irrational phenomena. In our study, subjects generally behave according to benchmark rationality. Traders who should herd or be contrarian in theory are the significant sources of both within the data. Correcting for subjects who can be identified as less rational increases our ability to predict herding or contrarian behavior considerably.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 63
Date: 2016-01-01
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Related works:
Working Paper: Herding and Contrarian Behavior in Financial Markets - An Experimental Analysis (2016)
Working Paper: Herding and Contrarian Behavior in Financial Markets: An Experimental Analysis (2016)
Working Paper: Herding and Contrarian Behavior in Financial Markets: An Experimental Analysis (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:269716

DOI: 10.22004/ag.econ.269716

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