Herding, Contrarianism and Delay in Financial Market Trading
Andreas Park and
Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
Herding and contrarian behavior are often-cited features of real-world financial markets. Theoretical models of continuous trading that study herding and contrarianism, however, usually do not allow traders to choose when to trade or to trade more than once. We present a large-scale experiment to explore these features within a tightly controlled laboratory environment. Herding and contrarianism are significantly more pronounced than in compa- rable studies that do not allow traders to time their decisions. Traders with extreme information tend to trade earliest, followed by those with information conducive to contrarianism, while those with the theoretical potential to herd delay the most.
Keywords: Herding; Contrarianism; Endogenous-time Trading; Experiments (search for similar items in EconPapers)
JEL-codes: C91 D82 G14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-fmk and nep-mst
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Journal Article: Herding, contrarianism and delay in financial market trading (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:0941
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