Framing Effects, Selective Information and Market Behavior An Experimental Analysis
Boris Maciejovsky and
Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group
The results of an asset market experiment, in which 64 subjects trade two assets on eight markets in a computerized continuous double auction, indicate that objectively irrelevant information influences trading behavior. Moreover, positively and negatively framed information leads to a particular trading pattern, but leaves trading prices and trading volume unaVected. In addition, we provide support for the disposition eVect. Participants who experience a gain sell their assets more rapidly than participants who experience a loss, and positively framed subjects generally sell their assets later than negatively framed subjects.
Keywords: financial markets; prospect theory; anchoring and adjustment; experimental economics; disposition eVect (search for similar items in EconPapers)
JEL-codes: C90 D44 D80 G12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-cfn and nep-exp
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Chapter: Framing Effects, Selective Information and Market Behavior: An Experimental Analysis (2010)
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