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Concentration and variability of forecasts in artificial investment games: an online experiment on WeChat

Author

Listed:
  • Xiu Chen

    (Southern University of Science and Technology)

  • Fuhai Hong

    (Lingnan University)

  • Xiaojian Zhao

    (Monash University
    Chinese University of Hong Kong (Shenzhen))

Abstract

This paper is the first to use the WeChat platform, one of the largest social networks, to conduct an online experiment of artificial investment games. We investigate how people’s forecasts about the financial market and investment decisions are shaped by whether they can observe others’ forecasts and whether they engage in public or private investment decisions. We find that with forecast sharing, subjects’ forecasts converge but in different directions across groups; consequently, forecast sharing does not lead to better forecasts nor more individually rational investment decisions. Whether or not subjects engage in public investment decisions does not significantly affect forecasts or investment.

Suggested Citation

  • Xiu Chen & Fuhai Hong & Xiaojian Zhao, 2020. "Concentration and variability of forecasts in artificial investment games: an online experiment on WeChat," Experimental Economics, Springer;Economic Science Association, vol. 23(3), pages 815-847, September.
    • Handle: RePEc:kap:expeco:v:23:y:2020:i:3:d:10.1007_s10683-019-09632-z
    DOI: 10.1007/s10683-019-09632-z
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    More about this item

    Keywords

    Forecast; Investment; Online experiment; WeChat;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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