Catch me if you can. Can human observers identify insiders in asset markets?
Thomas Stöckl and
Stefan Palan ()
Journal of Economic Psychology, 2018, vol. 67, issue C, 1-17
Securities regulators around the globe face the challenge of identifying trades based on privileged information. We study human observers’ ability to identify informed traders and investigate which trading patterns are indicative of informed trading using experimental asset markets. We furthermore test how the behavioral response of informed traders to the threat of detection and punishment impacts observers’ detection abilities. We find that market trading data carries information which correlates with informed trading activity. Observers partly succeed in recognizing and using this information to identify informed traders.
Keywords: Insider regulation; Insider detection; Asset market; Experiment (search for similar items in EconPapers)
JEL-codes: C92 D82 G12 G14 (search for similar items in EconPapers)
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Working Paper: Catch me if you can. Can human observers identify insiders in asset markets? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:67:y:2018:i:c:p:1-17
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