The Trade-Offs Between Collaboration and Competition in Financial Markets 

This set of studies examines how financial day traders exploit their communication and collaboration networks to improve their financial performance. In financial systems, continuous change in information creates uncertainty about when to trade. To disambiguate market information, traders corroborate with other traders in their networks to exchange both business and personal information.

The first study examines how traders’ communication patterns with their internal and external networks affects their performance. The second study explores how structural balance among traders’ interpersonal ties with one another affects the collective performance of the firm or macro system, and the third study explores how traders selectively choose to communicate their trading views and opinions to their contacts, and how their choices impact the propagation of financial news in their competition and collaboration networks.

Collaborators: Omid Askari, Francesco Bulli, Noah Friedkin, Ambuj Singh (UC Santa Barbara), Sonya Lim (DePaul) & Brian Uzzi (Northwestern)
Funding: U. S. Army Research Laboratory and the U.S. Army Research Office Multidisciplinary Research Initiative (MURI)

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