Preprint
Bubbles in Experimental Asset Markets: Irrational Exuberance No More
Abstract
The robustness of bubbles and crashes in markets for finitely lived assets is perplexing. This paper reports the results of experimental asset markets in which participants trade two assets. In some markets, price bubbles form. In these markets, traders will pay even higher prices for the asset with lottery characteristics, i.e., a claim on a large, unlikely payoff. However, institutional design has a significant impact on deviations in prices …
Authors
Ackert LF; Charupat N; Church BK; Deaves R
Publication date
January 1, 2001
DOI
10.2139/ssrn.287097
Preprint server
SSRN Electronic Journal