On the trading floor, all action is based on news, therefore rumors in financial markets are an everyday phenomenon. Rumors are the oldest mass medium in the world and their nature is still difficult to grasp. Scientifically, not much is known about rumors, especially in the financial markets, where their consequences can have real money consequences. Rumors in Financial Markets provides a fresh insight to the topic, combining the theory of Behavioral Finance with that of Experimental Finance–a new and innovative scientific method which observes real decision makers in a controlled, clearly structured environment. Using the results from surveys and experiments, the author argues that rumors in the context of financial markets are built on three cornerstones: Finance, Psychology and Sociology. The book provides insights into how rumors evolve, spread and are traded on and provides explanations as to why volatility rockets, strong price movements, herding behavior for example, occur for apparently no good reason.
Editorial Reviews
From the Inside Flap
On the trading floor, all action is based on news, therefore rumors in financial markets are an everyday phenomenon. Rumors are the oldest mass medium in the world and their nature is still difficult to grasp. Scientifically, not much is known about rumors, especially in the financial markets, where their consequences can have real money consequences. Rumors in Financial Markets provides a fresh insight to the topic, combining the theory of Behavioral Finance with that of Experimental Finance—a new and innovative scientific method which observes real decision makers in a controlled, clearly structured environment. Using the results from surveys and experiments, the author argues that rumors in the context of financial markets are built on three cornerstones: Finance, Psychology and Sociology. The book provides insights into how rumors evolve, spread and are traded on and provides explanations as to why volatility rockets, strong price movements, herding behavior for example, occur for apparently no good reason.
From the Back Cover
Conceptualizing the interplay of financial markets with psychological, interpersonal, organizational, and sociological impacts is key to successful behavioral finance analysis and research. Mark Schindler demonstrates the momentum and self dynamics of rumors among market participants and their social environment. – Prof. Dr. Roland W. Scholz, Institute for Environmental Decisions, Natural and Social Science Interface, ETH Zurich
Rumors are one of the most mystical aspects of finance. This book is an excellent work in finance that combines a nice survey of rumors as perceived by traders with legal aspects and scientific models. The book draws from a new approach in finance: experimental financial markets. This approach is ideal to study rumors since it is only in laboratory experiments that we have sufficient control about ‘who knows what when’. Rumors in Financial Markets is a must-read for anyone who is trading on financial markets and it is also a rich source of insights for anyone who writes about others’ trades. – Prof. Dr. Thorsten Hens, Swiss Banking Institut, University of Zurich
This book brilliantly exposes the role of rumors in the financial markets and in one sweep deals with an issue that ahs long been neglected: the significance of the source of news, and not just its contents. A truly relevant contribution to a better understanding of communication in the communication-intensive world of finance. – Alfons Cortes, Advisor to the Board, LGT Capital Management AG, Vaduz & Pfaffikon
About the Author
Mark Schindler has written his PhD on “Rumors in Financial Markets” at the Institute for Empirical Research in Economics at the University of Zurich under the supervision of Prof. Thorsten Hens and Prof. Ernst Fehr. Formerly he was working for Arthur Andersen in the area of Financial and Commodities Risk Consulting. He is currently a Funds of Hedge Funds manager for Bank Leu in Zurich.
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