ANALYSIS OF THE PHENOMENON OF SPECULATIVE TRADING IN ONE OF ITS BASIC MANIFESTATIONS: POSTAGE STAMP BUBBLES

B. Roehner () and D. Sornette ()
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B. Roehner: L.P.T.H.E., University Paris 7, 2 Place Jussieu, 75251 Paris Cedex 05, France
D. Sornette: IGPP and ESS Department, University of California, Los Angeles, California 90095, USA;

International Journal of Modern Physics C (IJMPC), 1999, vol. 10, issue 06, 1099-1116

Abstract: We document and analyze the empirical facts concerning one of the clearest evidence of speculation in financial trading as observed in the postage collection stamp market. We unravel some of the mechanisms of speculative behavior which emphasize the role of fancy and collective behavior. In our conclusion, we propose a classification of speculative markets based on two parameters, namely the amplitude of the price peak and a second parameter that measures its "sharpness". This study is offered to anchor modeling efforts to realistic market constraints and observations.

Keywords: Speculative bubble; Stock market; Collective behavior (search for similar items in EconPapers)
Date: 1999
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DOI: 10.1142/S0129183199000905

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