On 15th October 2018 (1-2pm)Jörg Oechssler, professor at the chair of Economics at the University of Heidelberg, will give a presentation about “Copy Trading” in Q4.245. Afterwards, Mr. Oechssle will be available for questions and discussions. His presentation is part of: wiwi.uni-paderborn.de/dep1/me/research/discussing-research/seam/
Copy trading allows traders in social networks to receive information on the success of other agents in financial markets and to directly copy their positions. The present paper studies the implications of copy trading for risk taking of financial agents from an experimental point of view. 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. Copy trading reduces ex-ante welfare, and leads to excessive risk taking.