Herding and Contrarian Behavior in Financial Markets - An Experimental Analysis

Andreas Park and Daniel Sgroi

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: We analyze and confirm the existence and extent of rational informational herding and rational informational contrarianism in a financial market experiment, and compare and contrast these with equivalent irrational phenomena. In our study, subjects generally behave according to benchmark rationality. Traders who should herd or be contrarian in theory are the significant sources of both within the data. Correcting for subjects who can be identified as less rational increases our ability to predict herding or contrarian behavior considerably

Keywords: Herding; Contrarianism; Informational Efficiency; Experiments (search for similar items in EconPapers)
JEL-codes: C91 D82 G14 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-exp
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https://warwick.ac.uk/fac/soc/economics/research/w ... twerp_1109_sgroi.pdf

Related works:
Working Paper: Herding and Contrarian Behavior in Financial Markets: An Experimental Analysis (2016)
Working Paper: Herding and Contrarian Behavior in Financial Markets: An Experimental Analysis (2016)
Working Paper: Herding and Contrarian Behavior in Financial Markets: An Experimental Analysis (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1109

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