search query: @journal_id 68 / total: 997
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| Author: | Willman, P. (et al.) |
| Title: | Noise trading and the management of operational risk; firms, traders and irrationality in financial markets |
| Journal: | Journal of Management Studies
2006 : SEP, VOL. 43:6, p. 1357-1374 |
| Index terms: | financial markets risk trading |
| Freeterms: | noise trading |
| Language: | eng |
| Abstract: | This article reviews the various attempts to explain noise trading in the finance literature, concluding that the persistence of irrationality is not well explained. Data from a study of 118 traders in four large investment banks are presented to advance reasons why traders might seek to trade more frequently than financial models predict. According to the authors the trades do not simply occur in order to generate profit, but it does not follow that such trading is irrational. Trading may generate information, accelerate learning, create commitments and enhance social capital, all of which sustain traders' long term survival in the market. |
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