Framing Effects, Selective Information andMarket Behavior An Experimental Analysis

The results of an asset market experiment, in which 64 subjects trade two assets oneight markets in a computerized continuous double auction, indicate that objectivelyirrelevant information influences trading behavior. Moreover, positively and negativelyframed information leads to a particular trading pattern, but leaves tradingprices and trading volume unaffected. In addition, we provide support for the dispositioneffect. Participants who experience a gain sell their assets more rapidly thanparticipants who experience a loss, and positively framed subjects generally sell theirassets later than negatively framed subjects.