A note on risk aversion and herd behavior in financial markets

Jean-Paul Décamps and Stefano Lovo

The Geneva Papers on Risk and Insurance Theory, 2006, vol. 31, issue 1, 35-42

Abstract: We show that differences in market participants risk aversion can generate herd behavior in stock markets where assets are traded sequentially. This in turn prevents learning of market’s fundamentals. These results are obtained without introducing multidimensional uncertainty or transaction cost. Copyright Springer Science + Business Media, LLC 2006

Keywords: Herd behavior; Risk aversion (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (4)

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Journal Article: A note on risk aversion and herd behavior in financial markets (2006)
Working Paper: A Note on Risk Aversion and Herd Behavior in Financial Markets (2006)
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DOI: 10.1007/s10713-006-9466-x

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