Can better forecasting abilities be harmful? Evidence from experimental asset markets
نویسندگان
چکیده
The question of how useful information in financial markets is has been discussed for decades and is still unresolved. In this paper we challenge the widely held belief that success and failure in the stock market can largely be attributed to the information underlying the trading decisions. We present a dynamic multi-period experimental financial market with asymmetrically informed traders whose information is based on future dividends. While the best informed traders can outperform the market, we find that information is not always useful, as average informed traders have significantly lower returns than the worst informed. JEL-classification: C91; D82; D83, G10
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