The Fear of Missing Out: A Major Force in Financial Markets
FOMO: A Key Driver of Investment Behavior
In the context of financial markets, FOMO (fear of missing out) is often referred to as the fear of missing out on a potentially lucrative investment opportunity. This study highlights the underlying mechanism between FoMO and individual investment behavior.
Billionaire Investor Buys Bitcoin after Experiencing FOMO
On June 17, 2021, billionaire trader and investor Stanley Druckenmiller revealed that he had bought Bitcoin after watching its price rise. This decision was largely driven by FOMO, as Druckenmiller feared missing out on the potential profits that could be made by investing in the cryptocurrency.
This research note proposes a decision theoretic definition of the popular phenomenon, providing a rigorous framework for understanding and predicting its impact on financial markets.
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