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Illusionary Finance and Trading Behavior
2005
Social Science Research Network
One important aspect of financial markets is that there might be some traders that intentionally mislead other market participants by creating illusions in order to obtain a profit. We call this new concept illusionary finance. We present an analysis of how illusions can be created and disseminated in financial markets based on certain psychological principles that explain agents' decisions under time pressure and polysemous signals. We develop a simple model that incorporates the illusions in
doi:10.2139/ssrn.884383
fatcat:dydl2zzctzcl7nnezdhtd2p2rm