Investor herding plays an important role in behavioral finance models. The quotation above is taken from Lakonishok, Shleifer, and Vishny (1992, p. 25). It exemplifies that the effect of herding on price discovery can be large when several large investors attempt to buy or sell a given stock at the same time. The herding behavior of institutional investors has seen a lot of attention in the last twenty years. Individual herding behavior, however, has been neglected.
KeywordsMutual Fund Institutional Investor Order Type Limit Order Individual Investor
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