Herding and Contrarian Behavior in Financial Markets: An Internet Experiment

URN to cite this document:: urn:nbn:de:bvb:355-epub-217119
DOI to cite this document:: 10.5283/epub.21711

Drehmann, M. ; Oechssler, J. ; Roider, Andreas

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Date of publication of this fulltext: 10 Aug 2011 08:30

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Abstract

We report results of an Internet experiment designed to test the theory of informational cascades in financial markets (Christopher Avery and Peter Zemsky, 1998). More than 6,400 subjects, including a subsample of 267 consultants from an international consulting firm, participated in the experiment. We find that the presence of a flexible market price prevents herding. The presence of contrarian ...