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Can You Keep a Secret? : The dissemination of false rumors and the evolution of bubbles in perceived predatory trading games
Herzing, Tobias J.; Muck, Matthias (2024): Can You Keep a Secret? : The dissemination of false rumors and the evolution of bubbles in perceived predatory trading games, in: International Review of Financial Analysis, Amsterdam: Elsevier, Jg. 96, Nr. A, 103592, S. 1–18, doi: 10.1016/j.irfa.2024.103592.
Faculty/Chair:
Author:
Title of the Journal:
International Review of Financial Analysis
ISSN:
1057-5219
Publisher Information:
Year of publication:
2024
Volume:
96
Issue:
A, 103592
Pages:
Language:
English
Abstract:
This research addresses the impact of fake rumors on the evolution of bubbles in stock prices in a perceived predatory trading game. In line with intuition, we find that the development of these bubbles is significantly different from the formation and progression of bubbles based on true rumors. Particularly, the first increase in stock prices may be followed by a crash when the rumor is not true. More volatility is observed when there are many players or when there is a lot of pressure to act on the victim. In contrast, the dissemination of the rumor has a dampening effect on the inflation of the bubble when the rumor is true. Moreover, it is more difficult to detect false rumors from stock prices when there are many predators. This observation makes herding among predators a particular challenging problem for regulators and policymakers.
Keywords: ;  ; 
Predatory trading
Stock market bubbles
Rumors
DDC Classification:
RVK Classification:
Peer Reviewed:
Yes:
International Distribution:
Yes:
Type:
Article
Activation date:
September 27, 2024
Project(s):
Versioning
Question on publication
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https://fis.uni-bamberg.de/handle/uniba/98433