2008-01-19 papers

on Market Microstructure

Issue of 2008‒01‒19
one paper chosen by
Thanos Verousis

Uninformative announcements and asset trading behavior By Brice Corgnet; Praveen Kujal; Dave Porter

Uninformative announcements and asset trading behavior

By:	Brice Corgnet; Praveen Kujal; Dave Porter
Abstract:	Financial markets are overwhelmed by daily announcements. We use experimental asset markets to assess the impact of uninformative communications on asset prices and trading volumes. We deliver uninformative messages in standard experimental asset markets and find that trading volumes and prices are impacted by these messages. In particular, the release of a pre-announced preset message to traders “The price is too high” in predetermined trading periods decreases the amplitude and duration of bubbles. Also, the release of the messages “The price is too high” or “The price is too low” reduces trading volume with inexperienced subjects.
Date:	2007–12
URL:	http://d.repec.org/n?u=RePEc:cte:werepe:we078350&r=mst

This issue is ©2008 by Thanos Verousis. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.

General information on the NEP project can be found at https://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.

NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.