Coordinated investing with feedback and learning
AbstractInvestors select how to distrubute funds between a number of projects. This paper departs from the standard financial market model by endogenizing the intrinsic value of the assets to be dependend upon the amount of funding they attract. Investment strategies based on fundamental and a momentum strategy are compared. Both strategies produce herding characteristics. For the fundamental strategy herding is optimal. The momentum strategy can result in suboptimal economic development, but can also produces greater success for the individual investors utilizing it.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Behavior & Organization.
Volume (Year): 65 (2008)
Issue (Month): 2 (February)
Contact details of provider:
Web page: http://www.elsevier.com/locate/jebo
Other versions of this item:
- David Goldbaum, 2004. "Coordinated Investing with Feedback and Learning," Working Papers Rutgers University, Newark 2004-008, Department of Economics, Rutgers University, Newark.
- David Goldbaum, 2003. "Coordinated Investing with Feedback and Learning," Computing in Economics and Finance 2003 213, Society for Computational Economics.
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
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