Irrelevant Information, Framing Effects, and Market Behavior : An Experimental Analysis

Abstract

The results of an asset market experiment, in which 64 subjects trade two assets on eight markets in a computerized continuous double auction, indicate that (i) objectively irrelevant information influences trading behavior. Moreover, positively and negatively framed information leads to a particular trading pattern. However (ii), a probability variation of the framed information has no influence on trading volume. In addition, the results (iii) confirm the disposition effect. Participants who experience a gain sell their assets more rapidly than participants who experience a loss, and positively framed subjects generally sell their assets later than negatively framed subjects.

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Cite this paper

@inproceedings{Kirchler2002IrrelevantIF, title={Irrelevant Information, Framing Effects, and Market Behavior : An Experimental Analysis}, author={Erich Kirchler and Boris Maciejovsky and Martin Weber}, year={2002} }