Analysis of Assets Distribution and Price Volatility-Based on Behavioral Financial Experiment

摘要

Assets distribution restrains trader behavior, so it is one of the factors that affect the stock price volatility. We conducted 13 trading experiments to analyze the relationship between assets distribution and price volatility. Results suggest that the price volatility is positively correlated with the non-uniformity and the changes of assets distribution, that is to say, the more nun-uniform assets distribute, the higher price fluctuates. The price fluctuation often follows a change of the assets distribution: the prices fluctuation goes up immediately when assets distribution changes significantly. We also show that the number of traders is a factor for the volatility of price because assets distribution is more likely to take a change if there are fewer traders in the market, which contribute to a wider prices fluctuation. The results can help us maintain market stability and establish an early warning mechanism.