Abstract
Greed has been shown to be an important economic motive. Both the popular press as well as scientific papers have mentioned questionable practices by greedy bankers and investors as one of the root causes of the 2008 global financial crisis. In spite of these suggestions, there is as of yet no substantive empirical evidence for a contribution of greed to individual trading behavior. This paper presents the result of 15 experimental asset markets in which we test the influence of greed on trading behavior. We do not find empirical support for the idea that greedier investors trade fundamentally different from their less greedy counterparts in markets. These findings shed light on the role of greed in trading and the emergence of asset market bubbles in specific, and of the financial crisis in general. Directions for future research are discussed.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
