Subscribe to the gold package and get unlimited access to Shamra Academy
Register a new userDo investors trade too much? A laboratory experiment
114
0
0.0
(
0
)
Ask ChatGPT about the research
No Arabic abstract
We run experimental asset markets to investigate the emergence of excess trading and the occurrence of synchronised trading activity leading to crashes in the artificial markets. The market environment favours early investment in the risky asset and no posterior trading, i.e. a buy-and-hold strategy with a most probable return of over 600%. We observe that subjects trade too much, and due to the market impact that we explicitly implement, this is detrimental to their wealth. The asset market experiment was followed by risk aversion measurement. We find that preference for risk systematically leads to higher activity rates (and lower final wealth). We also measure subjects expectations of future prices and find that their actions are fully consistent with their expectations. In particular, trading subjects try to beat the market and make profits by playing a buy low, sell high strategy. Finally, we have not detected any major market crash driven by collective panic modes, but rather a weaker but significant tendency of traders to synchronise their entry and exit points in the market.
rate research
Read More
Bilateral trade relationships in the international level between pairs of countries in the world give rise to the notion of the International Trade Network (ITN). This network has attracted the attention of network researchers as it serves as an excellent example of the weighted networks, the link weight being defined as a measure of the volume of trade between two countries. In this paper we analyzed the international trade data for 53 years and studied in detail the variations of different network related quantities associated with the ITN. Our observation is that the ITN has also a scale invariant structure like many other real-world networks.
In contrast to the rapid integration of the world economy, many regional trade agreements (RTAs) have also emerged since the early 1990s. This seeming contradiction has encouraged scholars and policy makers to explore the true effects of RTAs, including both regional and global trade relationships. This paper defines synthesized trade resistance and decomposes it into natural and artificial factors. Here, we separate the influence of geographical distance, economic volume, overall increases in transportation and labor costs and use the expectation maximization algorithm to optimize the parameters and quantify the trade purity indicator, which describes the true global trade environment and relationships among countries. This indicates that although global and most regional trade relations gradually deteriorated during the period 2007-2017, RTAs generate trade relations among members, especially contributing to the relative prosperity of EU and NAFTA countries. In addition, we apply the network to reflect the purity of the trade relations among countries. The effects of RTAs can be analyzed by comparing typical trade unions and trade communities, which are presented using an empirical network structure. This analysis shows that the community structure is quite consistent with some trade unions, and the representative RTAs constitute the core structure of international trade network. However, the role of trade unions has weakened, and multilateral trade liberalization has accelerated in the past decade. This means that more countries have recently tended to expand their trading partners outside of these unions rather than limit their trading activities to RTAs.
Perus abundant natural resources and friendly trade policies has made the country a major economic player in both South America and the global community. Consequently, exports are playing an increasingly important role in Perus national economy. Indeed, growing from 13.1% as of 1994, exports now contribute approximately 21% of the GDP of Peru as of 2015. Given Perus growing global influence, the time is ripe for a thorough analysis of the most important factors governing its export performance. Thus, within the framework of the augmented gravity model of trade, this paper examines Perus export performance and attempts to identify the dominant economic factors that should be further developed to increase the value of exports. The analysis was conducted from three different aspects: (1) general economic parameters effect on Perus export value, (2) more specific analysis into a major specific trade good, copper, and (3) the impact that regional trade agreements have had on Perus export performance. Our panel data analysis results for each dataset revealed interesting economic trends and were consistent with the theoretical expectations of the gravity model: namely positive coefficients for economic size and negative coefficients for distance. This reports results can be a reference for the proper direction of Peruvian economic policy so as to enhance economic growth in a sustainable direction.
The large-scale organization of the world economies is exhibiting increasingly levels of local heterogeneity and global interdependency. Understanding the relation between local and global features calls for analytical tools able to uncover the global emerging organization of the international trade network. Here we analyze the world network of bilateral trade imbalances and characterize its overall flux organization, unraveling local and global high-flux pathways that define the backbone of the trade system. We develop a general procedure capable to progressively filter out in a consistent and quantitative way the dominant trade channels. This procedure is completely general and can be applied to any weighted network to detect the underlying structure of transport flows. The trade fluxes properties of the world trade web determines a ranking of trade partnerships that highlights global interdependencies, providing information not accessible by simple local analysis. The present work provides new quantitative tools for a dynamical approach to the propagation of economic crises.
Tools of the theory of critical phenomena, namely the scaling analysis and universality, are argued to be applicable to large complex web-like network structures. Using a detailed analysis of the real data of the International Trade Network we argue that the scaled link weight distribution has an approximate log-normal distribution which remains robust over a period of 53 years. Another universal feature is observed in the power-law growth of the trade strength with gross domestic product, the exponent being similar for all countries. Using the rich-club coefficient measure of the weighted networks it has been shown that the size of the rich-club controlling half of the worlds trade is actually shrinking. While the gravity law is known to describe well the social interactions in the static networks of population migration, international trade, etc, here for the first time we studied a non-conservative dynamical model based on the gravity law which excellently reproduced many empirical features of the ITN.
Log in to be able to interact and post comments
comments
Fetching comments
Sign in to be able to follow your search criteria
