Framing Effects, Selective Information and Market Behavior ­ An Experimental Analysis ­

Erich Kirchler, Boris Maciejovsky and Martin Weber

Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group

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 objectively irrelevant information influences trading behavior. Moreover, positively and negatively framed information leads to a particular trading pattern, but leaves trading prices and trading volume unaVected. In addition, we provide support for the disposition eVect. 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.

Keywords: financial markets; prospect theory; anchoring and adjustment; experimental economics; disposition eVect (search for similar items in EconPapers)
JEL-codes: C90 D44 D80 G12 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2004-02
New Economics Papers: this item is included in nep-cbe, nep-cfn and nep-exp
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Citations: View citations in EconPapers (5)

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Chapter: Framing Effects, Selective Information and Market Behavior: An Experimental Analysis (2010)
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