Bubbles and Experience: An Experiment with a Steady Inflow of New Traders

Huan Xie and Jipeng Zhang

CIRANO Working Papers from CIRANO

Abstract: We revisit the effect of traders' experience on price bubbles by introducing either one-third or two-thirds steady inflow of new traders in the repeated experimental asset markets. We find that bubbles are not significantly abated by the third repetition of the market with the inflow of new traders. The relative importance of experience to the formation of bubbles depends on the proportion of new traders in the market. Our findings identify a market environment where experience is not sufficient to eliminate price bubbles.

Keywords: Price bubbles; experience; inflow of new traders; experiments (search for similar items in EconPapers)
Date: 2012-01-01
New Economics Papers: this item is included in nep-exp
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Citations: View citations in EconPapers (11)

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Working Paper: Bubbles and Experience: An Experiment with a Steady Inflow of New Traders (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:cir:cirwor:2012s-01

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