title: Copy Trading
creator: Apesteguia, Jose
creator: Oechssler, Jörg
creator: Weidenholzer, Simon
subject: 330
subject: 330 Economics
description: Copy trading allows traders in social networks to receive information on the success of other agents in financial markets and to directly copy their trades. Internet platforms like eToro, ZuluTrade, and Tradeo have attracted millions of users in recent years. The present paper studies the implications of copy trading for the risk taking of investors. Implementing an experimental financial asset market, we show that providing information on the success of others leads to a significant increase in risk taking of subjects. This increase in risk taking is even larger when subjects are provided with the option to directly copy others. We conclude that copy trading reduces ex-ante welfare, and leads to excessive risk taking.
date: 2018-06-27
type: Working paper
type: info:eu-repo/semantics/workingPaper
type: NonPeerReviewed
format: application/pdf
identifier: https://archiv.ub.uni-heidelberg.de/volltextserverhttps://archiv.ub.uni-heidelberg.de/volltextserver/24778/1/Apesteguia%2C%20Oechssler%2C%20and%20Weidenholzer%2C%202018%2C%20dp%20649.pdf
identifier: DOI:10.11588/heidok.00024778
identifier: urn:nbn:de:bsz:16-heidok-247788
identifier:   Apesteguia, Jose ; Oechssler, Jörg ; Weidenholzer, Simon  (2018) Copy Trading.  [Working paper]     
relation: https://archiv.ub.uni-heidelberg.de/volltextserver/24778/
rights: info:eu-repo/semantics/openAccess
rights: http://archiv.ub.uni-heidelberg.de/volltextserver/help/license_urhg.html
language: eng