Is financial instability male-driven? Gender and cognitive skills in experimental asset markets

Carlos Cueva and Aldo Rustichini (rusti001@umn.edu)
Additional contact information
Aldo Rustichini: University of Minnesota

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: The hypothesis that price stability would reliably increase with the fraction of women operating in financial markets has been frequently suggested in policy discussions. To test this hypothesis we conducted 10 male-only, 10 female-only and 10 mixed-gender experimental asset markets, and compared the effects of gender composition, confidence, risk attitude and cognitive skills. Male and female markets have comparable volatility and deviations from fundamentals, whereas mixed-gender markets are substantially more stable. On the other hand, higher average cognitive skills of the group are associated with reduced market volatility. Individual-level analysis shows that subjects with higher cognitive skills trade more rationally and earn significantly higher profits; similarly, mixed markets exhibit more rational behavior, particularly for traders with lower cognitive skills. Our results are demonstrated to hold in other experimental asset market studies, suggesting that a mixed-gender composition reduces mispricing across different types of asset markets.

Keywords: asset market experiment; mispricing; price bubbles; gender; cognitive ability (search for similar items in EconPapers)
JEL-codes: C91 C92 G02 G11 J16 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2015-05
New Economics Papers: this item is included in nep-cbe, nep-cfn, nep-exp and nep-neu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (61)

Published by Ivie

Downloads: (external link)
http://www.ivie.es/downloads/docs/wpasad/wpasad-2015-06.pdf Fisrt version / Primera version, 2015 (application/pdf)

Related works:
Journal Article: Is financial instability male-driven? Gender and cognitive skills in experimental asset markets (2015)
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:ivi:wpasad:2015-06

Access Statistics for this paper

More papers in Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) Contact information at EDIRC.
Bibliographic data for series maintained by Departamento de Edición (edicion@ivie.es).