eprintid: 24778
rev_number: 16
eprint_status: archive
userid: 3114
dir: disk0/00/02/47/78
datestamp: 2018-06-29 09:26:15
lastmod: 2018-09-04 16:46:14
status_changed: 2018-06-29 09:26:15
type: workingPaper
metadata_visibility: show
creators_name: Apesteguia, Jose
creators_name: Oechssler, Jörg
creators_name: Weidenholzer, Simon
title: Copy Trading
subjects: 330
divisions: 181000
cterms_swd: Copy trading
cterms_swd: Financial markets
cterms_swd: Social networks
cterms_swd: Imitation
cterms_swd: Experiment
abstract: 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
id_scheme: DOI
id_number: 10.11588/heidok.00024778
schriftenreihe_cluster_id: sr-3
schriftenreihe_order: 0649
ppn_swb: 1027052835
own_urn: urn:nbn:de:bsz:16-heidok-247788
language: eng
bibsort: APESTEGUIACOPYTRADIN20180627
full_text_status: public
series: Discussion Paper Series
volume: 0649
place_of_pub: Heidelberg
citation:   Apesteguia, Jose ; Oechssler, Jörg ; Weidenholzer, Simon  (2018) Copy Trading.  [Working paper]     
document_url: https://archiv.ub.uni-heidelberg.de/volltextserver/24778/1/Apesteguia%2C%20Oechssler%2C%20and%20Weidenholzer%2C%202018%2C%20dp%20649.pdf