When the stock market goes up or down and some pundit says there were
more sellers than buyers (or vice-versa) it's common for economists to
point out that for every buyer there is a seller. (Bill made this
argument recently and I have said this before also). Of course the
argument is correct in the sense that someone must buy what others
sell. The argument is generally incorrect, however, if taken to mean
that the number of buyers equals the number of sellers because it could
be the case that many buy and few sell but each seller sells more than
each buyer buys. Which leads me to my question. Does the number of
buyers and sellers vary with the direction of stock movements? For
example, during a crash is it the case that a few buyers are buying a
lot and many sellers are selling a little? Does anyone know of work
done on this question?
Cheers
Alex
--
Dr. Alexander Tabarrok
Vice President and Director of Research
The Independent Institute
100 Swan Way
Oakland, CA, 94621-1428
Tel. 510-632-1366, FAX: 510-568-6040
Email: [EMAIL PROTECTED]
