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- Andersson, Maria, 1977, et al.
(författare)
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Effects of consistency and accurate predictions of stock prices on herding in a simulated financial market.
- 2008
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Ingår i: Poster presented at the 29th annual conference of the Society for Judgment and Decision Making, Chicago, USA..
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Konferensbidrag (övrigt vetenskapligt/konstnärligt)abstract
- In a simulated financial market setting we investigate the degree to which participants in judgment tasks were influenced by other (fictitious) participants’ judgments. Two experiments examine the influence from random vs. accurate majorities (Experiment 1), random vs. accurate minorities (Experiment 2), and whether the influence was affected by instructing participants to focus on the accuracy in performance (Experiments 1 and 2). Results show that participants followed majorities irrespectively of their level of accuracy, whereas accurate minorities were more influential than random minorities. The focus instruction decreased majority influence, regardless of accuracy, but increased the influence from accurate minorities.
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- Andersson, Maria, 1977, et al.
(författare)
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Effects of financial incentives on herding in simulated financial markets
- 2008
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Ingår i: Paper presented at the International Association for Research in Economic Psychology (IAREP), Rome, Italy..
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Konferensbidrag (refereegranskat)abstract
- Herding in financial markets refers to that investors influence each other when making investment decisions. In these experimental studies, herding leads to worse performance relative to relying on private information. Previous studies of herding have shown that majorities in general are more influential than minorities. The aim of this research was to investigate whether financial incentives impact herding with majorities and minorities under these conditions. In two experimental simulations of a financial market, participants predicted an “upmarket” or “downmarket” conditional on diagnostic information presented on each trial. In Experiment 1, participants in an individual condition only received private information, while participants in a group condition, in addition, received information about randomly generated predictions ostensibly made by three others. Economic incentives for accurate predictions were based on individual performance, and were hypothesized to counteract reliance on invalid information about the herd’s choices. As expected, performance was worse in the group condition than in the individual condition, implying that participants were influenced by the herd. In Experiment 2, the effects of financial incentives for making predictions similar to either the majority or the minority of the others were examined. We hypothesized that financially rewarding group performance may reinforce non-systematic processing, and hence enhance majority influence. Since minority influence is associated with systematic processing, we hypothesized that systematic processing in minority conditions may increase the influence of the private information, and thus improve performance. The results showed that participants followed the majority but not the minority. One explanation for the asymmetry in the effects of rewarding herding with a majority and a minority may be the notion that the tendency to conform overrides systematic processing in majority influence, whereas the reverse would be true in minority influence.
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- Andersson, Maria, 1977, et al.
(författare)
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Experimental Studies of Majority Influences in Financial Markets.
- 2008
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Ingår i: Paper presented at the 6th Nordic conference on group and social psychology (GRASP), Lund University, Sweden.
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Konferensbidrag (refereegranskat)abstract
- Herding in financial markets refers to that investors imitate others when making investment decisions. The aim of this research is to investigate factors that would break influences of a majority of others. In one experiment we investigate the impact of the size of a herd (majority vs. minority), accuracy of the herds’ predictions, and attentional focus. Undergraduates serving as participants are asked to predict fictitious stock prices in 50 trials, conditional on information about the current price and predictions made by five fictitious other participants. The prices and the others’ predictions are generated by random sampling. A majority of the others’ predictions is correlated (rs .95), and the predictions made by the majority are either random (uncorrelated with the price, r <.20) or accurate (correlated with the price, range of rs equal to .65 - .85). Participants are instructed to focus their attention on either accuracy or consistency of the others’ predictions. The results showed that a focus on accuracy reduced majority influence, whereas a focus on consistency had no effect. This was true both in the conditions with accurate and inaccurate majorities. An ongoing additional experiment investigates whether an accurate minority has an influence when its predictions have higher predictive validity than the price. The level of accuracy in the predictions made by the minority is either random (uncorrelated with the price, r <.20) or accurate (correlated with the price, rs .95).
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| 7. |
- Andersson, Maria, 1977, et al.
(författare)
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The effect of accuracy and focus on herding in financial predictions.
- 2008
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Ingår i: Paper presented at the 10th meeting of the European Social Cognition Network (ESCON), Volterra, Italy..
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Konferensbidrag (refereegranskat)abstract
- Herding in financial markets refers to that investors influence each other when making investment decisions. Previous studies of herding have shown that a majority is more influential than a minority. This result is in line with theories of social influence, arguing that majorities in general are more influential but consistent minorities may also exert influence. The aim of this research is to investigate what factors may impact the level of influence from minorities and majorities in financial markets, focusing on accuracy and focal attention. Experiment 1 investigates the impact of the size of the herd (majority vs. minority) and the accuracy in its predictions. Participants’ task was to predict fictitious stock prices in 50 trials, conditional on information about the current price and predictions made by five fictitious other participants. Either four (majority) or two (minority) of the others’ predictions were correlated (rs > .95), and they made either random (uncorrelated with the price trend, rs < .20) or non-random predictions (correlated with the price trend, range of rs equal to .65 to .85). The results showed that the majority exerted more influence than did the minority, more when the majority made non-random than random predictions. The correlation and accuracy of predictions thus increased the majority influence, but not the minority influence. The aim of Experiment 2 was to investigate whether the majority influence would decrease if participants were instructed to focus on the others’ performance. Conditions in which the majority made random or non-random predictions were included. After a number of trials participants were requested to state either which of the others that made accurate predictions or which of the others that made predictions that were correlated. The results showed that focus on accuracy reduced majority influence.
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- Biel, Anders, 1948, et al.
(författare)
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Behavioural Impediments to Sustainable Investment.
- 2007
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Ingår i: Paper presented at the 32nd IAREP Conference, Ljubljana, Slovenia..
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Konferensbidrag (refereegranskat)abstract
- The present study investigates impediments to sustainable investment (SI) that reside within the organizations of institutional investors. A questionnaire was addressed to 35 institutional investors with board directors, senior investment managers or portfolio managers acting as respondents. The respondents represented SI as well as non-SI funds. Presently, little is known about how variations in the endorsement of values and norms among members in an organisation affect decision making. We tested the hypothesis that to the extent that a SI policy has been adopted, members of the organisation share a norm to advance SI, driven by an adherence to social and environmental values, together with beliefs about potential benefits of SI. We also examined an alternative model assuming a direct link between beliefs about financial outcomes of SI and SI practices in the organisation.
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- Boe, O., et al.
(författare)
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Effects of causal relatedness and uncertainty on integration of outcomes of concurrent decisions
- 2015
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Ingår i: Proceedings of 2nd Global Conference on Psychology Researches 28-29 November 2014 - University of Barcelona, Spain. - Amsterdam : Elsevier Science Bv. - 1877-0428. ; 190, s. 113-119
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Konferensbidrag (refereegranskat)abstract
- Purpose of Study: An experiment was conducted to investigate whether causally related outcomes of concurrent decisions are more frequently integrated than unrelated outcomes, and whether certain outcomes are more frequently integrated than uncertain outcomes. Method: Sixteen undergraduates in one group chose between buying means-end related and unrelated pairs of everyday consumer products, whereas 16 undergraduates in another group chose between lottery tickets with the consumer products as prizes. Findings and Results: The results indicated that both causal relatedness and uncertainty of outcomes of concurrent decisions affect integration. Conclusions: Means and ends were more often chosen when they were presented in the same sets of two concurrent decisions than when they were presented together with unrelated options or singly. The observed differences were smaller when choices were made between uncertain outcomes. (C) 2015 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license.
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- Boe, O., et al.
(författare)
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Failures to integrate causally related outcomes of concurrent decisions
- 2015
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Ingår i: Procedia - Social and Behavioral Sciences, 190(May). - Amsterdam : Elsevier Science Bv. - 1877-0428.
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Konferensbidrag (refereegranskat)abstract
- Problem statement: Sometimes concurrent decisions are not integrated. Purpose of study: An experiment was conducted to investigate whether causally related options of concurrent decisions are not evaluated and therefore not chosen although their combinations are more attractive than single options. In two concurrent decisions participants chose between buying means-end related and unrelated pairs of everyday consumer products. Method: Sixteen undergraduates in one group were sometimes forced to choose the end (or the means), whereas 16 undergraduates in another group were always free to choose the end and means. Findings and results: In the forced choices, participants chose the means or ends presumably because they attended to the additional benefits. Conclusions: However, when free to make both choices participants only chose the ends and means 22% of the time. 28% of the choices were made of only an end or a means, and 50% of the choices were made of two unrelated options. (C) 2015 The Authors. Published by Elsevier Ltd.
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