Trading and cognition in asset markets: An eye-tracking experiment
We investigate models of traders’ types and their underlying cognitive mechanisms. To this aim, we perform an asset market laboratory experiment, in which we analyze trading and forecast decisions to classify subjects’ performance into three models of traders’ types: feedback, passive, and speculator. We study participants’ patterns of attention and information sampling using eye-tracking data. The main question we aim to answer is to what extent the patterns observed from information process data are consistent with those observed in behavioral from trading and forecast data. Our results show that the coherence between traders’ types and their expected patterns of attention does not hold equally for all types of traders. First, we do not find the expected relationship between feedback traders and patterns of attention. Second, the expected dominant source of information concerning passive traders is partially rejected. Finally, we find evidence for coherence between speculator traders and their underlying information sampling.