Copy Trading.
Copy trading allows traders in social networks to receive information on the success of other agents in financial markets and to directly copy their trades. Internet platforms like eToro , ZuluTrade , and Tradeo have attracted millions of users in recent years. The present paper studies the implications of copy trading for the risk taking of investors. Implementing a novel experimental financial asset market, we show that providing information on the success of others leads how to copy trade crypto (http://cryptocurrency.copy-trade.fun) a significant increase in risk taking of subjects. This increase in risk taking is even larger when subjects are provided with the option to directly copy others. We conclude that copy trading leads to excessive risk taking.
This paper was accepted by Axel Ockenfels, decision analysis .
European Journal of Operational Research, Vol. 306, crypto copy trading strategy No. 3.
Journal of Economic Behavior & Organization, Vol. 203.
Mingwen Yang , Zhiqiang (Eric) Zheng , Vijay Mookerjee.
25 October 2021 | Management Science, Vol. 68, No. 7.
29 July 2021 | European Financial Management, Vol. 28, No. 3.
The Quarterly Review of Economics and Finance, Vol. 82.
Journal of Economic Behavior & Organization, Vol. 188.
Electronic Commerce Research and copy trading for cryptocurrency Applications, Vol. 44.
Volume 66, Issue 12.
December 2020.
Pages 5485-6064, iii-iv.
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Received: June 07, 2019 Accepted: September 13, 2019 Published Online: July 14, 2020.
Copyright © 2020, INFORMS.
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Keywords.
copy trading financial markets social networks imitation experiment.