Apesteguia, Jose and Oechssler, Jörg and Weidenholzer, Simon (2020) 'Copy trading.' Management Science, 66 (12). pp. 5485-6064. ISSN 0025-1909
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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 a novel 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 leads to excessive risk taking.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | Copy trading; Financial markets; Social networks; Imitation; Experiment |
| Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
| SWORD Depositor: | Elements |
| Depositing User: | Elements |
| Date Deposited: | 19 Sep 2019 10:36 |
| Last Modified: | 06 Jan 2022 14:05 |
| URI: | http://repository.essex.ac.uk/id/eprint/25396 |
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