Rumours in Financial Markets

- List of symbols
- Preface

1 Introduction
1.1.Objectives of this book
1.2.Structure of this book
1.3.Research methodology

2 Definitions and Characteristics of Rumors
2.1 Definitions
2.2 Historical background of studies on rumors

3 Rumors and the Theory of Finance
3.1.Rumors and Behavioral Finance
3.2.Rumors and rational behavior
3.3.Empirical studies of rumors in the stock market
3.4.Review of models on rumors
3.5. Ethnographical studies

4 Legal Aspects of Rumors in Financial Markets
4.1.Rumors in financial markets and insider trading
4.2.Review of models on insider trading
4.3.Rumors in financial markets and price manipulation
4.4.Review of models on market manipulation

5 Survey of Rumors in Financial Markets
5.1.The survey and its intention
5.2.Participant profile
5.3. Evolvement of rumors
5.4.Spreading of rumors
5.5.Belief in rumors
5.6.Network formation
5.7.Trading on rumors
5.8.Rumors vs. information
5.9. Conclusions from the survey

6 Rumors Experiments
6.1.Why experiments as a research methodology?
6.2. Methodological pre-considerations
6.3.Review of previous rumor experiments
6.4.First stage experiments: Ambiguity aversion in a financial market
6.5.Second stage experiments: Varying rumor messages
6.6.Third stage experiments: Testing herding behavior
6.7.Fourth stage experiments: Communication

7 Conclusions and Outlook

- Appendix
- Appendix I:
- Appendix I.1: Formal presentation of preference relations and choice rules
- Appendix II:
- Appendix II.1: Experimental instructions for the rumor setting with an auctioneer (experiments 1 and 2)
- Appendix II.2: Experimental instructions for the rumor setting with a batch auction (experiments 3 and 4)
- Appendix II.3: Experimental instructions for the rumor setting in a continuous double auction (experiments 5 to 12)
- Appendix III:
- Appendix III.1: Second stage experimental instructions
- Appendix IV:
- Appendix IV.1: Third stage experimental

Mark Schindler has written his PhD on "Rumors in Financial Markets" at the Institute for Empirical Research in Economics at the University of Zurich under the supervision of Prof. Thorsten Hens and Prof. Ernst Fehr. Formerly he was working for Arthur Andersen in the area of Financial and Commodities Risk Consulting. He is currently a Funds of Hedge Funds manager for Bank Leu in Zurich.