On Tuesday April 4, 2023 (12:15-13:45), Prof. Dr. Tibor Neugebauer (University of Luxemburg) will be giving the following talk:
“Does Wash Trading Impact Information Dissemination in Security Markets?”
We are happy to welcome you all at this session.
The talk will be held on-site, as well as online:
Andreassstrasse 15, 8050 Zürich, Room AND-4-06 (4. floor)
Meeting-ID: 617 6146 4901
Wash trading is a manipulative practice involving fake transactions intended to mislead other market participants. In simple laboratory markets for a one-period security we examine the impact of an algorithmic wash trader on market prices. Our experimental treatments vary the amount of available information as well as the strategy pursued by the algorithmic wash trader. We apply the minimally intelligent agent model to predict the outcomes in the experiment. We find that the wash trader in fact distorts market prices in a predictable way. Surprisingly the number of subject-initiated transactions increases in presence of wash trading. We also find that the excessive gains from insider information tend to decline with wash trading.