Download or read book Herding and Contrarian Behavior in Financial Markets written by Andreas Park and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Herding and Contrarian Behavior in Financial Markets written by and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Herding Contrarian Behavior in Financial Markets written by Andreas Park and published by . This book was released on 2009 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Herd Behavior in Financial Markets written by Sushil Bikhchandani and published by . This book was released on 2000 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book An Experimental Study of Herding and Contrarian Behavior Among Financial Investors written by Valentin Azofra-Palenzuela and published by . This book was released on 2006 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: One of the arguments to explain the existence of anomalies in capital markets is the existence of cognitive biases in the behaviour of investors. Our goal is to study one of these cognitive biases: herding among investors. Our laboratory experiment results lead us to reject that subjects' tendency to herd is to blame for inadequate price formation in financial markets. In a setting where subjects receive a fixed payment, their reputation cannot be questioned and gathering private information does not prove costly, individuals do not display any tendency to herd. Moreover, we observe contrarian behaviour which leads subjects to take decisions against their own private information, ignoring public information they already have available.

Download or read book Herd Behavior in Financial Markets written by Antonio Guarino and published by INTERNATIONAL MONETARY FUND. This book was released on 2008-06-01 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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 so that herding should never occur, and one in which event uncertainty makes herding possible. In the first treatment, subjects herd seldom, in accordance with both the theory and previous experimental evidence on student subjects. A proportion of subjects, however, engage in contrarianism, something not accounted for by the theory. In the second treatment, the proportion of herding decisions increases, but not as much as theory suggests; moreover, contrarianism disappears altogether.

Download or read book Herd Behavior in Financial Markets written by Marco Cipriani and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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 so that herding should never occur, and one in which event uncertainty makes herding possible. In the first treatment, subjects herd seldom, in accordance with both the theory and previous experimental evidence on student subjects. A proportion of subjects, however, engage in contrarianism, something not accounted for by the theory. In the second treatment, the proportion of herding decisions increases, but not as much as theory suggests; moreover, contrarianism disappears altogether.

Download or read book Noise Traders and Herding Behavior written by Lee Scott Redding and published by International Monetary Fund. This book was released on 1996-09-01 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent developments in financial economics have included many explorations into market microstructure, that is, the internal functioning of markets and the ways in which they provide liquidity to traders. An important contribution of this literature is that prices can deviate from their fundamental values. This paper describes models of imperfect liquidity and improperly processed information in financial markets, focusing on the noise trader and investor herding literature. The motivations for this line of research are presented, followed by a description of some of the major contributions and tests of some of their empirical implications.

Download or read book Herding and Contrarian Behaviour in Financial Markets written by Andreas Park and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Contrarian Investment Strategies written by David Dreman and published by Simon and Schuster. This book was released on 2012-01-10 with total page 498 pages. Available in PDF, EPUB and Kindle. Book excerpt: Introduces important new findings in psychology to demonstrate why most investment strategies are flawed, outlining atypical strategies designed to prevent over- and under-valuations while crash-proofing a portfolio.

Download or read book Ambiguity in Financial Markets written by J. L. Ford and published by . This book was released on 2005 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Herd Behavior in Financial Markets written by Sushil Bikhchandani and published by . This book was released on 2005 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: Policymakers often express concern that herding by financial market participants destabilizes markets and increases the fragility of the financial system. This paper provides an overview of the recent theoretical and empirical research on herd behavior in financial markets. It addresses the following questions: What precisely do we mean by herding? What could be the causes of herd behavior? What success have existing studies had in identifying such behavior? And what effect does herding have on financial markets?

Download or read book Essays on Trading in Financial Markets written by Alessia Testa and published by . This book was released on 2012 with total page 270 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first part of the thesis consists of three chapters focusing on herd behavior in financial markets. Chapter one reviews the herding literature while chapter two studies a market where informed and noise traders show up sequentially and anonymously in front of a competitive and risk neutral market maker. Traders can in some cases observe whether some of their predecessors were informed, although they cannot observe their private in- formation. This creates an informational asymmetry between the traders and the market maker which generates herd behavior. I find that herd and contrarian behavior is gener- ated more easily in better-informed markets than in poorly informed ones. Informational cascades can never occur and the market learns in the limit. Moreover, I illustrate how a market dominated by herding features a price that is more informative of the asset value than the price of a market where traders always follow their signal. I also discuss how contrarianism has the exact opposite effect by decreasing price informativeness. In chap- ter two I consider the case of multiple trading rooms, where traders can in some cases observe whether some of the predecessors coming from the same room were informed. I first analyze herding conditions for the case of disconnected rooms where agents trading during the same time exhibit information correlation, and find that herding is more likely to occur in a market with positive correlation than in a market without correlation. I then link rooms by means of a network structure which dictates which rooms' predecessors one can observe. I check whether it is possible for a trader to herd with traders outside his own neighborhood instead of with his direct neighbors. I find that the answer to this question is negative and that herding cannot spread from one part of the market to another. Finally, I bring together information correlation and the network structure and I illustrate the example of a market where there are trading histories such that herd behavior can lead to the complete loss of information and, once herding has started, learning can be recovered only if noise traders enter the market. In the second part of the thesis I build a signalling model of delegated portfolio management where the manager can be of different qualities which affect the performance of the closed-end fund under his management. I find that in his effort to appear of high quality, the manager sends signals to the market which affect the share price of the fund in such a way that momentum and reversal are generated. While in the momentum phase, the price accumulates a discount with respect to its net asset value; during the reversal phase, the discount narrows and the price reverses back towards the net asset value of the fund.

Download or read book The Triumph of Contrarian Investing written by Nathan E. Davis and published by McGraw-Hill Companies. This book was released on 2004 with total page 177 pages. Available in PDF, EPUB and Kindle. Book excerpt: "The Triumph of Contrarian Investing provides you with analysis and indicators proven to spotlight those points at which investor optimism or pessimism is at its strongest, then show you how to go against the grain - and profit - in virtually every instance."--BOOK JACKET.Title Summary field provided by Blackwell North America, Inc. All Rights Reserved

Download or read book Estimating a Structural Model of Herd Behavior in Financial Markets written by Antonio Guarino and published by International Monetary Fund. This book was released on 2010-12-01 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: We develop a new methodology to estimate the importance of herd behavior in financial markets: we build a structural model of informational herding that can be estimated with financial transaction data. In the model, rational herding arises because of information-event uncertainty. We estimate the model using data on a NYSE stock (Ashland Inc.) during 1995. Herding often arises and is particularly pervasive on some days. The proportion of herd buyers (sellers) is 2 percent (4 percent) and is greater than 10 percent in 7 percent (11 percent) of information-event days. Herding causes important informational inefficiencies, amounting, on average, to 4 percent of the expected asset value.

Download or read book Path Dependent Behavior and Information Leakage in Financial Markets written by Alessia Testa and published by . This book was released on 2018 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: I develop a new mechanism that exploits the leakage of information in financial markets to deliver herding and contrarian behavior, which I label “path-dependent behavior”. The mechanism is related to the role of word-of mouth communication in transmitting information about stocks among traders. In practice, this occurs via dealing interactions and a notable phenomenon called “the broker's ear”. I find that, for a suitably long trading history, path-dependent behavior is more likely the better the quality of traders' private information. Herding in the direction of the true state of the world occurs almost surely for any initial beliefs, and it improves price informativeness. An external observer who under/overestimates the rate of information leakage will always over/underestimate the quality of private information. I also show that when the quality of private information is very high and the asymmetry of information between traders and market maker is pronounced, the market is expected to herd 50% of the time. Nonetheless, this has little impact on order imbalance, excluding cases exhibiting catastrophic price behaviour.

Download or read book Investor Behavior written by H. Kent Baker and published by John Wiley & Sons. This book was released on 2014-02-10 with total page 645 pages. Available in PDF, EPUB and Kindle. Book excerpt: WINNER, Business: Personal Finance/Investing, 2015 USA Best Book Awards FINALIST, Business: Reference, 2015 USA Best Book Awards Investor Behavior provides readers with a comprehensive understanding and the latest research in the area of behavioral finance and investor decision making. Blending contributions from noted academics and experienced practitioners, this 30-chapter book will provide investment professionals with insights on how to understand and manage client behavior; a framework for interpreting financial market activity; and an in-depth understanding of this important new field of investment research. The book should also be of interest to academics, investors, and students. The book will cover the major principles of investor psychology, including heuristics, bounded rationality, regret theory, mental accounting, framing, prospect theory, and loss aversion. Specific sections of the book will delve into the role of personality traits, financial therapy, retirement planning, financial coaching, and emotions in investment decisions. Other topics covered include risk perception and tolerance, asset allocation decisions under inertia and inattention bias; evidenced based financial planning, motivation and satisfaction, behavioral investment management, and neurofinance. Contributions will delve into the behavioral underpinnings of various trading and investment topics including trader psychology, stock momentum, earnings surprises, and anomalies. The final chapters of the book examine new research on socially responsible investing, mutual funds, and real estate investing from a behavioral perspective. Empirical evidence and current literature about each type of investment issue are featured. Cited research studies are presented in a straightforward manner focusing on the comprehension of study findings, rather than on the details of mathematical frameworks.