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Short and Long Term Investor Synchronization Caused by Decoupling

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  • Magda Roszczynska-Kurasinska
  • Andrzej Nowak
  • Daniel Kamieniarz
  • Sorin Solomon
  • Jørgen Vitting Andersen

Abstract

The dynamics of collective decision making is not yet well understood. Its practical relevance however can be of utmost importance, as experienced by people who lost their fortunes in turbulent moments of financial markets. In this paper we show how spontaneous collective “moods” or “biases” emerge dynamically among human participants playing a trading game in a simple model of the stock market. Applying theory and computer simulations to the experimental data generated by humans, we are able to predict the onset of such moments before they actually happen.

Suggested Citation

  • Magda Roszczynska-Kurasinska & Andrzej Nowak & Daniel Kamieniarz & Sorin Solomon & Jørgen Vitting Andersen, 2012. "Short and Long Term Investor Synchronization Caused by Decoupling," PLOS ONE, Public Library of Science, vol. 7(12), pages 1-8, December.
    • Handle: RePEc:plo:pone00:0050700
    DOI: 10.1371/journal.pone.0050700
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    References listed on IDEAS

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    Cited by:

    1. Roberto Savona & Maxence Soumare & Jørgen Vitting Andersen, 2015. "Financial Symmetry and Moods in the Market," PLOS ONE, Public Library of Science, vol. 10(4), pages 1-21, April.
    2. Liu, Yi-Fang & Andersen, Jørgen Vitting & Frolov, Maxime & de Peretti, Philippe, 2021. "Synchronization in human decision-making," Chaos, Solitons & Fractals, Elsevier, vol. 143(C).
    3. Andersen, Jørgen Vitting & de Peretti, Philippe, 2021. "Heuristics in experiments with infinitely large strategy spaces," Journal of Business Research, Elsevier, vol. 129(C), pages 612-620.
    4. Roberto Savona & Maxence Soumare & Jørgen Vitting Andersen, 2014. "Financial Symmetry and Moods in the Market," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00983008, HAL.

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