Fuzzy relations for the analysis of traders' preferences in an information market game
van de Walle,B.A. Turoff,M.
van de Walle,B.A.
Turoff,M.
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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Date
2009
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van de Walle, B A & Turoff, M 2009, 'Fuzzy relations for the analysis of traders' preferences in an information market game', European Journal of Operational Research, vol. 195, no. 3, pp. 905-913.