at the University of California-Berkeley. I would like
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@MISC{Odean_atthe,
author = {Terrance Odean and To Thank Brad Barber and Hayne Lel and David Modest and Mark Rubinstein and Paul Ruud and Richard Thaler},
title = {at the University of California-Berkeley. I would like},
year = {}
}
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Abstract
Trading volume on the world’s markets seems high, perhaps higher than can be explained by models of rational markets. For example, the average annual turnover rate on the New York Stock Exchange (NYSE) is currently greater than 75 percent 1 and the daily trading volume of foreign-exchange transactions in all currencies (including forwards, swaps, and spot transactions) is roughly one-quarter of the total annual world trade and investment flow (James Dow and Gary Gorton, 1997). While this level of trade may seem disproportionate to investors’ rebalancing and hedging needs, we lack economic models that predict what trading volume in these market should be. In theoretical models trading volume ranges from zero (e.g., in rational expectation models without noise) to infinite (e.g., when traders dynamically hedge in the absence of trading costs). But without a model which predicts what trading volume
