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

B.A. van de Walle, M. Turoff

    Research output: Contribution to journalArticleScientificpeer-review

    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.
    Original languageEnglish
    Pages (from-to)905-913
    JournalEuropean Journal of Operational Research
    Volume195
    Issue number3
    Publication statusPublished - 2009

    Fingerprint

    Decision theory
    Fuzzy Relation
    Game
    Students
    Ranking
    Social Choice
    Decision Analysis
    Market
    Information market
    Traders
    Market games
    Consecutive
    Calculate
    Alternatives
    Market share

    Cite this

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    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.",
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    Fuzzy relations for the analysis of traders' preferences in an information market game. / van de Walle, B.A.; Turoff, M.

    In: European Journal of Operational Research, Vol. 195, No. 3, 2009, p. 905-913.

    Research output: Contribution to journalArticleScientificpeer-review

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    AB - 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.

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