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Framing Effects on Selected Information and Market Behavior - an Experimental Analysis
Erich Kirchler University of Vienna - Department of Psychology Boris Maciejovsky Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics Martin Weber University of Mannheim - Department of Banking and Finance; Centre for Economic Policy Research (CEPR) The Journal of Behavioral Finance, Vol. 6, No. 2, pp. 90-100, 2005 Abstract: The results of an asset market experiment, in which 64 subjects trade two assets on eight markets in a computerized continuous double auction, indicate that (i) objectively irrelevant information influences trading behavior. Moreover, positively and negatively framed information leads to a particular trading pattern. However (ii), a probability variation of the framed information has no influence on trading volume. In addition, the results (iii) confirm the disposition effect. Participants who experience a gain sell their assets more rapidly than participants who experience a loss, and positively framed subjects generally sell their assets later than negatively framed subjects.
Keywords: Financial markets, Prospect theory, Anchoring and adjustment, Experimental economics, Disposition effect JEL Classifications: C90, D44, D80, G12 Accepted Paper SeriesDate posted: March 18, 2002 ; Last revised: July 02, 2009Suggested CitationContact Information
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