Sarah Mignot und Frank Westerhoff publizieren Artikel in der Zeitschrift "Mathmatics and Computers in Simulation"

Contagious popular stories, stock market participation, and boom–bust cycles

Sarah Mignot und Frank Westerhoff

Weitere Infos finden Sie hier:

https://www.sciencedirect.com/science/article/pii/S0378475425000886

Abstract:

We study a model in which investors’ stock market participation hinges on contagious popular stories. Two opposing narratives exist that either advocate investing in the stock market or abstaining from it. Investors’ adherence to these narratives depends on the current behavior of the stock market and the social interactions among investors. For instance, stories that advocate investing in the stock market appear more plausible to investors during boom periods and when such behavior is common among peers. We identify different constellations in which waves of market entry and exit, driven by contagious popular stories, create boom–bust stock market dynamics.