Research On Positive Feedback Strategies Of Chinese Institutional Traders

Since behavioral finance rose, the researchers have found many abnormalphenomenons and behavioral bias on the markets, which have challenged standardfinance. Of these abnormal phenomenons and behavioral bias, positive feedbackstrategies are important findings in the field of behavioral finance because they makepeople reinvestigate the behavior of the insititutional traders. However, most papers focuson investigating whether there are positive feedback strategies in the market, whereas justa few papers talk about the reason for the strategies. We focus our research on positivefeedback strategies of Chinese institutional investors, and our work includes:Firstly, we give a generalization of the definition and the current study of positivefeedback strategies, including the research on whether there are positive strategies in themarkets and the influence of the positive strategies on the markets.Secondly, we give some introduction of the model of perceived risk proposed byYang Chunpeng in the year of 2005, and on the basis of this model, we find out the reasonfor positive feedback strategies via prospect theory.Finally, we use the data of 24 closed funds to examine if positive feedback strategieswere carried out by institutional investors, and we exactly find out that there ismomentum trading in our country, and at last thinking about the reality of positivestrategies in the markets of our county, we propose some advice.