Individual Investors Trading Strategies and Responsiveness to Information - A Virtual Stock Market Field Experiment

抄録

We conduct a novel virtual stock market experiment that aims to investigate the motives behind short-term investment behavior at the individual decision-making level. In particular, we focus on individual investors' trading strategies in response public information ? about prices, macroeconomic news, and relevant individual-stock information. The distinguishing feature of our experiment is the use of factual contemporaneous news items directly related to the stocks in subjects' portfolios. We find that more information leads among our experiment participants to more frequent trading; majority of it is positive-feedback following individual stock prices and the market as a whole. Our subjects are driven by psychological motives when deciding their orders; in particular, regret aversion is a habitually common reason for trading and for not trading ? through the disposition effect.