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Asset market manipulation: A field experiment with racetrack betting

Camerer, Colin F. (2008) Asset market manipulation: A field experiment with racetrack betting. In: Handbook of Experimental Economics Results. Handbooks in Economics. Vol.1. No.28. Elsevier , Amsterdam, pp. 720-724. ISBN 9780444826428.

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The possibility that asset markets could be strategically manipulated by large informed traders has fascinated social scientists and market observers for years. There is a well-known story of minions of Nathan Rothschild, who was thought to have the fastest carrier pigeons in London, selling shares during the Battle of Waterloo to drive the price down artificially (the news was actually good for British share prices) so others trading on his behalf could quietly buy up shares cheaply. This kind of attempt by informed speculators to fool markets by trading against their information, luring others to trade in the same way in order to profit later, was also observed in laboratory markets by Noth and Weber (1996), and Plott, Wit, and Yang (1996). More recently (in the late 1990s and 2000) the fact that intraday volatility of many NASDAQ is so extremely high has been attributed to speculators pushing up prices of thinly-traded stocks, knowing that “day traders” will often chase trends so the speculators can sell later at higher prices to the day traders.

Item Type:Book Section
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Camerer, Colin F.0000-0003-4049-1871
Additional Information:© 2008 Elsevier. Available online 12 July 2008.
Series Name:Handbooks in Economics
Issue or Number:28
Record Number:CaltechAUTHORS:20110222-114240384
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Official Citation:Colin F. Camerer, Chapter 76 Asset Market Manipulation: A Field Experiment with Racetrack Betting, In: Charles R. Plott and Vernon L. Smith, Editor(s), Handbook of Experimental Economics Results, Elsevier, 2008, Volume 1, Pages 720-724, ISSN 1574-0722, ISBN 9780444826428, DOI: 10.1016/S1574-0722(07)00076-5.
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:22423
Deposited By: Tony Diaz
Deposited On:08 Mar 2011 23:47
Last Modified:09 Nov 2021 16:05

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