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New paper on analysts' and traders' influence on bubbles

posted Sep 11, 2019, 11:48 PM by Graz FinanceResearch   [ updated Sep 11, 2019, 11:49 PM ]
A joint paper of platform member Stefan Palan with Marcus Giamattei, Jürgen Huber, Johann Graf Lambsdorff and Andreas Nicklisch, titled "
Who inflates the bubble? Forecasters and traders in experimental asset markets", has recently been published (online first) in the Journal of Economic Dynamics and Control. It experimentally studies the interaction of traders and analysts and teases apart their respective roles in producing bubble patterns. We find the greatest bubbles in settings where the roles of trader and analyst are clearly separated, with traders trying to maximize their trading profit and analysts being paid for their forecasting accuracy.
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