Abstract
Greed has been shown to be an important economic motive. Both the popular press as well as scientific articles have mentioned questionable practices by greedy bankers and investors as one of the root causes of the 2008 global financial crisis. In spite of these suggestions, there is as of yet no substantive empirical evidence for a contribution of greed to individual trading behavior. This article presents the result of 15 experimental asset markets in which we test the influence of greed on trading behavior. We do not find empirical support for the idea that greedier investors trade fundamentally differently from their less greedy counterparts in markets. These findings shed light on the role of greed in trading and the emergence of asset market bubbles in specific, and of the financial crisis in general. Directions for future research are discussed. (PsycInfo Database Record (c) 2021 APA, all rights reserved)
| Original language | English |
|---|---|
| Pages (from-to) | 80-96 |
| Number of pages | 17 |
| Journal | Decision |
| Volume | 8 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 2021 |
Bibliographical note
Publisher Copyright:© 2021 American Psychological Association
Copyright:
Copyright 2021 Elsevier B.V., All rights reserved.
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
-
SDG 10 Reduced Inequalities -
SDG 17 Partnerships for the Goals
Keywords
- bubbles
- dispositional greed
- experimental asset markets
- experimental finance
- mispricing
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