Rumors In Financial Markets: Insights Into Behavioral Finance

On the trading floor, all action is based on news, therefore rumours in financial markets are an everyday phenomenon. Scientifically, not much is known about rumours, especially in the financial markets where it is thought that their consequences have such an impact economically.

'Rumours In Financial Markets' provides a fresh insight to the topic, combining the theory of Behavioural 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 claims that rumours 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.