Copy trading

Arbeitspapier

Abstract: Copy trading allows traders in social networks to receive information on the success of other agents in financial markets and to directly copy their trades. Internet platforms like eToro, ZuluTrade, and Tradeo have attracted millions of users in recent years. The present paper studies the implications of copy trading for the risk taking of investors. Implementing an experimental financial asset market, we show that providing information on the success of others leads to a significant increase in risk taking of subjects. This increase in risk taking is even larger when subjects are provided with the option to directly copy others. We conclude that copy trading reduces ex-ante welfare, and leads to excessive risk taking.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Discussion Paper Series ; No. 649

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Criteria for Decision-Making under Risk and Uncertainty ; Asset Pricing; Trading Volume; Bond Interest Rates ; Financial Institutions and Services: General ; Behavioral Finance: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets‡
• Thema: Copy trading ; Financial markets ; Social networks ; Imitation ; Experiment

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Apesteguia, Jose ; Oechssler, Jörg ; Weidenholzer, Simon
• Ereignis: Veröffentlichung
• (wer): University of Heidelberg, Department of Economics
• (wo): Heidelberg
• (wann): 2018

Weitere Informationen

• DOI: doi:10.11588/heidok.00024778
• Handle: http://hdl.handle.net/10419/207625
• URN: urn:nbn:de:bsz:16-heidok-247788
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ