Warwick Economics Working Research Series
Our Working Papers series feature new ideas and research from academics within the Department of Economics.
The vast majority of papers are available online, the early of which is from 1975. If a paper is unavailable online, hard copies can be requested free of charge.
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Herding and Contrarian Behavior in Financial
We analyze and con rm the existence and extent of rational informational herding and rational informational contrarianism in a financial market experiment, and compare and contrast these with equivalent irrational phenomena. In our study, subjects generally behave according to benchmark rationality. Traders who should herd or be contrarian in theory are the signi cant sources of both within the data. Correcting for subjects who can be identified as less rational increases our ability to predict herding or contrarian behavior considerably.