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The Herd Behavior of Risk-Averse Investor Based on Information Cost
College of Science, Guilin University of Technology, Guilin, China
- 1 College of Science, Guilin University of Technology, Guilin, China
Journal of Financial Risk Management·Volume 02 (2013)·Pages 87–91·Published 2 October 2013·DOI10.4236/jfrm.2013.24015
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Abstract
In this paper, the traditional model of herd behavior was improved and extended. The herd behavior of risk-averse investor based on information cost was studied in the financial market. By refining the concept of Bayes equilibrium and the analysis of the behavior of investors, it was discovered that the herd behavior of the second risk-averse investor did not produce until the first risk-averse investors chose to buy information.
KeywordsRisk AvoidanceInformation CostHerd Behavior
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