Herding behavior in prediction markets: evidence from UK financial spread trading markets

Cheah, J. ORCID: 0000-0003-2953-3815, Sung, M.-C., Johnson, J., Gulthawatvichai, S. and Tai, C.-C., 2022. Herding behavior in prediction markets: evidence from UK financial spread trading markets. Journal of Prediction Markets. ISSN 1750-6751 (Forthcoming)

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Abstract

We contrast the degree (strong vs. weak), nature (interaction between more and less informed traders; MI and LI, respectively) and patterns of herding behavior (via their feedback strategies) amongst MI and LI traders and their speed of reaction to shifts in trading by these groups. This is achieved by analyzing individual investment records of 1,943 traders in UK spread-trading markets (2010-2012). We find that herding is far more prevalent than previous studies suggest, particularly amongst LI, herding activity of MI and LI are related and the means used to distinguish MI and LI needs to be considered carefully.

Item Type: Journal article
Publication Title: Journal of Prediction Markets
Creators: Cheah, J., Sung, M.-C., Johnson, J., Gulthawatvichai, S. and Tai, C.-C.
Publisher: University of Buckingham Press
Date: 24 May 2022
ISSN: 1750-6751
Identifiers:
NumberType
1550117Other
Divisions: Schools > Nottingham Business School
Record created by: Laura Ward
Date Added: 30 May 2022 13:20
Last Modified: 30 May 2022 13:20
URI: http://irep.ntu.ac.uk/id/eprint/46387

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