Fuzzy relations for the analysis of traders' preferences in an information market game

Document Type

Article

Publication Date

6-16-2009

Abstract

In this paper we focus on preference and decision data gathered during a computer-supported information market game in which 35 students participated during seven consecutive trading sessions. The participants' individual preferences on the market shares are collected to calculate a collective preference ranking using the Borda social choice method. Comparing this preference ranking to the shares' actual market ranking resulting from the participants' trading, we find a statistically significant difference between both rankings. As the preferences established by market behavior cannot be adequately explained through a social choice rule, we propose an alternative explanation based on the herd behavior phenomenon where traders imitate the most successful trader in the market. Using a decision analysis technique based on fuzzy relations, we study the participants' rankings of the best share in the market during 7 weeks and compare the most successful trader to the other traders. The results from our analysis show that a substantial number of traders is indeed following the market leader. © 2007 Elsevier B.V. All rights reserved.

Identifier

56349120761 (Scopus)

Publication Title

European Journal of Operational Research

External Full Text Location

https://doi.org/10.1016/j.ejor.2007.11.022

ISSN

03772217

First Page

905

Last Page

913

Issue

3

Volume

195

Fund Ref

European Commission

This document is currently not available here.

Share

COinS