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Trading and cognition in asset markets: An eye-tracking experiment

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  • Cornand, Camille
  • Erazo Diaz, Maria Alejandra
  • Zylbersztejn, Adam

Abstract

We use an experimental asset market with eye-tracker measurements for a novel exploration of the cognitive validity of a classic heterogeneous trader taxonomy. Following a top-down approach, we assume that the patterns of information acquisition are governed by one of the three trading strategies, either feedback, passive, or speculative. In line with our first hypothesis, speculators seek information about market expectations. Notwithstanding the two other hypotheses, feedback traders reveal patterns of information acquisition that could ex ante be expected from passive traders, and vice versa.

Suggested Citation

  • Cornand, Camille & Erazo Diaz, Maria Alejandra & Zylbersztejn, Adam, 2023. "Trading and cognition in asset markets: An eye-tracking experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 711-732.
    • Handle: RePEc:eee:jeborg:v:216:y:2023:i:c:p:711-732
    DOI: 10.1016/j.jebo.2023.10.019
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    More about this item

    Keywords

    Experiment; Asset market; Information acquisition; Eye-tracking;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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