Noise Traders and Herding Behavior

Noise Traders and Herding Behavior
Author :
Publisher : International Monetary Fund
Total Pages : 16
Release :
ISBN-10 : 9781451947960
ISBN-13 : 1451947968
Rating : 4/5 (968 Downloads)

Book Synopsis Noise Traders and Herding Behavior by : Lee Scott Redding

Download or read book Noise Traders and Herding Behavior written by Lee Scott Redding and published by International Monetary Fund. This book was released on 1996-09-01 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent developments in financial economics have included many explorations into market microstructure, that is, the internal functioning of markets and the ways in which they provide liquidity to traders. An important contribution of this literature is that prices can deviate from their fundamental values. This paper describes models of imperfect liquidity and improperly processed information in financial markets, focusing on the noise trader and investor herding literature. The motivations for this line of research are presented, followed by a description of some of the major contributions and tests of some of their empirical implications.


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