Online Finance
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Gur Huberman, Director |
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Online trading provides a new opportunity for understanding the decisions made by individual investors. We can talk not only about markets, but about traders. We can talk not just about prices, but about transactions. These data can serve to refocus the analysis of investment decisions on the individual trader. This work — in progress — looks at a panel of investors as they make online trades.
The behavior of lay investors is of increasing importance, as individually-managed retirements accounts hold nearly $2 trillion in the U.S. alone. In collaboration with Nobel laureate William F. Sharpe, we have developed new technologies to study individuals’ preferences for risk and return, and evaluate how these may differ from what is provided by traditional investment products.
