eprintid: 14427
rev_number: 28
eprint_status: archive
userid: 600
dir: disk0/00/01/44/27
datestamp: 2009-07-13 13:36:00
lastmod: 2015-07-23 09:36:16
status_changed: 2009-07-13 13:36:00
type: working_paper
metadata_visibility: show
creators_name: Cipriani, M.
creators_name: Guarino, A.
creators_id: 
creators_id: AGUAR93
title: Herd behavior in financial markets: a field experiment with financial market professionals
ispublished: pub
subjects: 12000
subjects: 13200
divisions: F24
abstract: We study herd behavior in a laboratory financial market with financial
market professionals. We compare two treatments: one in
which the price adjusts to the order flow in such a way that herding
should never occur, and one in which the presence of event uncertainty
makes herding possible. In the first treatment, traders seldom herd,
in accordance with both the theory and previous experimental evidence
on student subjects. A proportion of traders, however, engage
in contrarianism, something not accounted for by the theory. In the
second treatment, on the one hand, the proportion of herding decisions
increases, but not as much as the theory would suggest; on the
other hand, contrarianism disappears altogether. In both treatments,
in contrast with what theory predicts, subjects sometimes prefer to
abstain from trading, which affects negatively the process of price discovery.
date: 2007-06
publisher: ESRC Centre for Economic Learning and Social Evolution
official_url: http://else.econ.ucl.ac.uk/newweb/papers.php#2007
vfaculties: VSHS
oa_status: green
language: eng
primo: open
primo_central: open_green
lyricists_name: Guarino, A
lyricists_id: AGUAR93
full_text_status: public
series: ELSE Working Papers
number: 272
place_of_pub: London, UK
citation:        Cipriani, M.;    Guarino, A.;      (2007)    Herd behavior in financial markets: a field experiment with financial market professionals.                    (ELSE Working Papers  272). ESRC Centre for Economic Learning and Social Evolution: London, UK.       Green open access   
 
document_url: https://discovery.ucl.ac.uk/id/eprint/14427/1/14427.pdf