Park, Andreas and Sgroi, Daniel (2009) Herding and contrarianism in a financial trading experiment with endogenous timing. In: Royal Economic Society Annual Conference 2009, University of Surrey, 20-22 Apr 2009 (Unpublished)

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Abstract

We undertook the first market trading experiments that allowed heterogeneously informed subjects to trade in endogenous time, collecting over 2000 observed trades. Subjects’ decisions were generally in line with the predictions of exogenous-time financial herding theory when that theory is adjusted to allow rational informational herding and contrarianism. While herding and contrarianism did not arise as frequently as predicted by theory, such behavior occurs in a significantly more pronounced manner than in comparable studies with exogenous timing. Types with extreme information traded earliest. Of those with more moderate information, those with signals conducive to contrarianism traded earlier than those with information conducive to herding.

Item Type:	Conference Item (Paper)
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics
Official Date:	20 April 2009
Dates:	Date Event 20 April 2009 Completion
Status:	Not Peer Reviewed
Publication Status:	Unpublished
Funder:	Economic and Social Research Council (ESRC), SSHRC, Leverhulme Trust, Cambridge Endowment for Research in Finance
Conference Paper Type:	Paper
Title of Event:	Royal Economic Society Annual Conference 2009
Type of Event:	Conference
Location of Event:	University of Surrey
Date(s) of Event:	20-22 Apr 2009
Related URLs:	Organisation

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