Symmetric Information Bubbles: Experimental Evidence

Yasushi Asako (), Yukihiko Funaki (), Kozo Ueda and Nobuyuki Uto ()
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Nobuyuki Uto: Waseda University

No 1613, Working Papers from Waseda University, Faculty of Political Science and Economics

Abstract: This study experimentally analyzes tradersíchoices, with and without asymmetric information, based on the riding-bubble model. While asymmetric information has been necessary to explain a bubble in past theoretical models, our experiments show that traders have an incentive to hold a bubble asset for longer, thereby expanding the bubble in a market with symmetric, rather than asymmetric information. This Önding implies a possibility that information symmetry promotes cooperation. However, when traders are more experienced, the size of the bubble decreases, in which case bubbles do not arise, even with symmetric information.Length: 45 pages

Keywords: riding bubbles; crashes; asymmetric information; experiment; clock game (search for similar items in EconPapers)
JEL-codes: C72 D82 D84 E58 G12 G18 (search for similar items in EconPapers)
Date: 2016-12
New Economics Papers: this item is included in nep-exp, nep-gth, nep-mac and nep-ore
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Related works:
Journal Article: (A)symmetric information bubbles: Experimental evidence (2020)
Working Paper: (A)symmetric Information Bubbles: Experimental Evidence (2019)
Working Paper: Symmetric information bubbles: Experimental evidence (2017)
Working Paper: (A)symmetric Information Bubbles: Experimental Evidence (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:wap:wpaper:1613

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