To See is To Know: Simultaneous Display of Market Data for Retail Investors

61 Pages Posted: 8 Oct 2013 Last revised: 5 Jul 2017

Hedi Benamar

Board of Governors of the Federal Reserve System

Date Written: April 10, 2017

Abstract

I test whether the display format of market data affects the trading performance and behavior of retail investors. To do so, I exploit a large brokerage dataset covering a period during which the market information provided to the broker’s customers changed in format, but not in content. I find that a simultaneous display of cross-stock market data reduces the cognitive cost of monitoring the market and thus helps investors obtain better execution prices. In particular, investors better mitigate non-execution and adverse-selection risks when trading with limit orders. Hence, the display format of market data matters for the individual investor.

Keywords: behavioral finance, market microstructure, household finance

JEL Classification: D14, G02, G11

Suggested Citation

Benamar, Hedi, To See is To Know: Simultaneous Display of Market Data for Retail Investors (April 10, 2017). Available at SSRN: https://ssrn.com/abstract=2336035 or http://dx.doi.org/10.2139/ssrn.2336035

Hedi Benamar (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

HOME PAGE: http://www.hedibenamar.net

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