1593MGIMO University, 76, Prosp. Vernadskogo, Moscow, 119454, Russian Federation
Abstract. The article deals with the behavioral mechanisms of functioning of modern financial market. Author points out to the formation of a permanent latent information asymmetry as well as fragmentation of information preferences of different investors’ groups. This leads to concentration of “bid data” and related technologies with the professional market participants. However, such intellectualization of financial transactions does not preclude the investors from fallacy in asset selection and financial losses. Laypersons as well as professionals continue to follow their subjective motivations (gut feelings, intuition) and all of them are proving to be irrational. Author cites the results of studies showing that overconfidence of professionals worsens their investment results. Meantime, non-professional retail investors can not only move the market prices, but also outperform the professionals. The likelihood that professionals will outperform laypersons in all financial transactions is doubtful. This behavior increases overall market uncertainty and reduces the accuracy of market forecasts. Author agrees with conclusions of Western researchers that irrational behavior of professional well-informed investors may reduce negative impact of information asymmetry on the non-professional and not informed investors. Under these conditions, the development of “big data” processing and analyzing technologies cannot radically change the behavior of investors and increase the rationality of the financial market. However, penetration of mobile technologies in capital markets can increase the ability of retail investors to monitor the market as well as their ability to select assets. These technologies may help principals in agent–principal relations to protect their interests. As for the professional investors and financial institutions, “big data” helps them to establish more flexible and friendly client relation with retail customers. Still, the author concludes that the basic financial market paradigm is not yet to be revised.
Keywords: latent information asymmetry, uncertainty, big data, financial market
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