Bubbles And Crashes In Experimental Asset Markets
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Bubbles And Crashes In Experimental Asset Markets
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Author : Stefan Palan
language : en
Publisher: Springer Science & Business Media
Release Date : 2009-10-03
Bubbles And Crashes In Experimental Asset Markets written by Stefan Palan and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-10-03 with Business & Economics categories.
This book describes a laboratory experiment designed to test the causes and properties of bubbles in financial markets and explores the question whether it is possible to design markets which avoid such bubbles and crashes. In the experiment, subjects were given the opportunity to trade in a stock market modeled after the seminal work of Smith et al. (1988). To account for the increasing importance of online betting sites, subjects were also allowed to trade in a digital option market. The outcomes shed new light on how subjects form and update their expectations, placing special emphasis on the bounded rationality of investors. Various analytical bubble measures found in the literature are collected, calculated, classified and presented for the first time. The very interesting new bubble measures "Dispersion Ratio", "Overpriced Transactions" and "Underpriced Transactions" are developed, making the book an important step towards the research goal of preventing bubbles and crashes in financial markets.
Essays On Bubbles And Crashes In Experimental Asset Markets
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Author : Kun Zhang (Ph.D.)
language : en
Publisher:
Release Date : 2015
Essays On Bubbles And Crashes In Experimental Asset Markets written by Kun Zhang (Ph.D.) and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with Asset-liability management categories.
The main result is that team decision-making does not result in smaller price bubbles. However team decision-making result in less variance among markets (sessions). Further more, my experimental design allows us to record the chat dialogues, which enable us to have insight into team decision-making. The content of the messages allows us explore the reasons behind traders' asks and bids.
Bubbles And Crashes In Experimental Asset Markets
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Author : Stefan Palan
language : en
Publisher: Springer
Release Date : 2010-02-04
Bubbles And Crashes In Experimental Asset Markets written by Stefan Palan and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-02-04 with Business & Economics categories.
This book describes a laboratory experiment designed to test the causes and properties of bubbles in financial markets and explores the question whether it is possible to design markets which avoid such bubbles and crashes. In the experiment, subjects were given the opportunity to trade in a stock market modeled after the seminal work of Smith et al. (1988). To account for the increasing importance of online betting sites, subjects were also allowed to trade in a digital option market. The outcomes shed new light on how subjects form and update their expectations, placing special emphasis on the bounded rationality of investors. Various analytical bubble measures found in the literature are collected, calculated, classified and presented for the first time. The very interesting new bubble measures "Dispersion Ratio", "Overpriced Transactions" and "Underpriced Transactions" are developed, making the book an important step towards the research goal of preventing bubbles and crashes in financial markets.
Bubbles And Crashes In Experimental Asset Markets
DOWNLOAD
Author : Stefan Palan
language : en
Publisher: Springer
Release Date : 2010-02-04
Bubbles And Crashes In Experimental Asset Markets written by Stefan Palan and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-02-04 with Business & Economics categories.
This book describes a laboratory experiment designed to test the causes and properties of bubbles in financial markets and explores the question whether it is possible to design markets which avoid such bubbles and crashes. In the experiment, subjects were given the opportunity to trade in a stock market modeled after the seminal work of Smith et al. (1988). To account for the increasing importance of online betting sites, subjects were also allowed to trade in a digital option market. The outcomes shed new light on how subjects form and update their expectations, placing special emphasis on the bounded rationality of investors. Various analytical bubble measures found in the literature are collected, calculated, classified and presented for the first time. The very interesting new bubble measures "Dispersion Ratio", "Overpriced Transactions" and "Underpriced Transactions" are developed, making the book an important step towards the research goal of preventing bubbles and crashes in financial markets.
Essays On Bubbles And Crashes In Experimental Asset Markets
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Author : Kun Zhang
language : en
Publisher:
Release Date : 2015
Essays On Bubbles And Crashes In Experimental Asset Markets written by Kun Zhang and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
Bubbles In Experimental Asset Markets
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Author : Lucy F. Ackert
language : en
Publisher:
Release Date : 2015
Bubbles In Experimental Asset Markets written by Lucy F. Ackert and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
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 from fundamental values, particularly for an asset with lottery characteristics. Price run-ups and crashes are moderated when traders finance purchases of the assets themselves and are allowed to short sell.
On Booms That Never Bust
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Author : Brice Corgnet
language : en
Publisher:
Release Date : 2018
On Booms That Never Bust written by Brice Corgnet and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
Cognitive Bubbles
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Author : Ciril Bosch-Rosa
language : en
Publisher:
Release Date : 2017
Cognitive Bubbles written by Ciril Bosch-Rosa and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
Smith et al. (1988) reported large bubbles and crashes in experimental asset markets, a result that has been replicated many times. Here we test whether the occurrence of bubbles depends on the experimental subjects' cognitive sophistication. In a two-part experiment, we first run a battery of tests to assess the subjects' cognitive sophistication and classify them into low or high levels. We then invite them separately to two asset market experiments populated only by subjects with either low or high cognitive sophistication. We observe classic bubble and crash patterns in the sessions populated by subjects with low levels of cognitive sophistication. Yet, no bubbles or crashes are observed with our sophisticated subjects, indicating that cognitive sophistication of the experimental market participants has a strong impact on price efficiency.
Anchoring In Experimental Asset Markets
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Author : Sascha Baghestanian
language : en
Publisher:
Release Date : 2015
Anchoring In Experimental Asset Markets written by Sascha Baghestanian and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
Mind Body Bubble Psychological And Biophysical Dimensions Of Behavior In Experimental Asset Markets
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Author : David Butler
language : en
Publisher:
Release Date : 2018
Mind Body Bubble Psychological And Biophysical Dimensions Of Behavior In Experimental Asset Markets written by David Butler and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
Asset market bubbles and crashes are a major source of economic instability and inefficiency. Sometimes ascribed to animal spirits or irrational exuberance, their source remains imperfectly understood. Experimental methods can isolate systematic deviations from an asset's fundamental value in a manner not possible on the trading floor. In this chapter, we review evidence from dozens of laboratory experiments that investigate the measurement and manipulation of an array of psychological and biophysical attributes. Measures of emotion self-regulation and interoceptive ability are informative, as is cognitive ability and the level and fluctuation of hormones.Rules that promote deliberative decision making can improve market efficiency, while incidental emotions can impair it. Signals in specific brain areas can be a trigger precipitating a bubble's collapse. We conclude that trading decisions are profoundly biophysical in a manner not captured by efficient markets models, and close with speculations on implications for algorithmic trading.