It is Not Just Confusion! Strategic Uncertainty in an Experimental Asset Market

Eizo Akiyama (), Nobuyuki Hanaki and Ryuichiro Ishikawa

No 1340, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: To what extent is the observed mis-pricing in experimental asset markets caused by strategic uncertainty (SU) and by individual bounded rationality (IBR)? We address this question by comparing subjects initial price forecasts in two market environments – one with six human traders, and the other with one human and five computer traders. We find that both SU and IBR account equally for the median initial forecasts deviation from the fundamental values. The effect of SU is greater for subjects with a perfect score in the Cognitive Reflection Test, and it is not significant for those with low scores.

Keywords: Bounded rationality; Strategic uncertainty; Experiment; Asset markets; Computer traders; Cognitive Re?ection Test (search for similar items in EconPapers)
JEL-codes: C90 D84 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2013-08-08, Revised 2013-08-08
New Economics Papers: this item is included in nep-cbe and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://www.amse-aixmarseille.fr/sites/default/files/_dt/2012/wp_2013_-_nr_40.pdf (application/pdf)

Related works:
Journal Article: It is Not Just Confusion! Strategic Uncertainty in An Experimental Asset Market (2017)
Working Paper: It is Not Just Confusion! Strategic Uncertainty in an Experimental Asset Market (2017)
Working Paper: It is Not Just Confusion! Strategic Uncertainty in an Experimental Asset Market (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aim:wpaimx:1340

Access Statistics for this paper

More papers in AMSE Working Papers from Aix-Marseille School of Economics, France AMU-AMSE - 5-9 Boulevard Maurice Bourdet, CS 50498 - 13205 Marseille Cedex 1. Contact information at EDIRC.
Bibliographic data for series maintained by Gregory Cornu ().