Social Sciences
4 years ago

Financial Markets Swirl with Rational Herding and Contrarian Behavior

The Warwick Economics Research Paper Series (TWERPS)
Herding and Contrarian Behavior in Financial Markets - An Experimental Analysis
Andreas Park, Daniel Sgroi

Paper Summary

The article explores how people act in financial markets. They found that most people make decisions based on logic. Traders who should follow the crowd or go against it are the main influencers. Fixing mistakes made by less logical people helps predict crowd-following or contrarian behavior better.

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