Market manipulation with sentiment traders

Zeng, Qingduo, Liu, Shancun, Qu, Yi and Zhang, Qiang (2018) Market manipulation with sentiment traders. Applied Economics Letters, 25 (4). pp. 239-243. ISSN 1350-4851

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Official URL: http://dx.doi.org/10.1080/13504851.2017.1313947

Abstract

This article offers a new perspective for traders’ sentiment by bridging the relationship between feedback effect and market manipulation. Allowing access to information regarding manipulated orders confuses sentiment traders, leading to an overestimation of the true asset value which actually remains the same. We find that sentiment factor has a nonmonotonic impact on the responsiveness to order information and price informativeness. Furthermore, it is shown that informed traders behave like a contrarian, and can use order information to reassess the price, which results in the multiplicity of equilibria.

Item Type: Article
Uncontrolled Keywords: sentiment, feedback effect, rational expectation equilibrium, multiple equilibria
Subjects: N300 Finance
N500 Marketing
Department: Faculties > Business and Law > Newcastle Business School > Business and Management
Depositing User: Yi Qu
Date Deposited: 05 Sep 2017 09:57
Last Modified: 28 Mar 2018 09:24
URI: http://nrl.northumbria.ac.uk/id/eprint/31712

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