Copy trading

• Verfasst von: Apesteguia, Jose [VerfasserIn]
• Verfasst von: Oechssler, Joerg [VerfasserIn]
• Verfasst von: Weidenholzer, Simon [VerfasserIn]
• Titel: Copy trading
• Verf.angabe: Jose Apesteguia, Jörg Oechssler, and Simon Weidenholzer
• Verlagsort: Heidelberg
• Verlag: University of Heidelberg, Department of Economics
• E-Jahr: 2018
• Jahr: June 27, 2018
• Umfang: 1 Online-Ressource
• Gesamttitel/Reihe: Discussion paper series / University of Heidelberg, Department of Economics ; no. 649
• Fussnoten: Key words: Copy trading, Financial markets, Social networks, Imitation, Experiment; JEL codes: C91, D81, G12, G20, G41
• DOI: doi:10.11588/heidok.00024778
• URN: urn:nbn:de:bsz:16-heidok-247788
• Schlagwörter: (s)Kreditmarkt / (s)Soziales Netzwerk / (s)Nachahmung / (s)Experiment
• Datenträger: Online-Ressource
• Sprache: eng
• Form-SW: Graue Literatur
• K10plus-PPN: 1027052835
• K10plus-PPN:
  Universitätsbibliothek
• Lokale URL UB: Zum Volltext

Abstract

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.