Super-exponential bubbles in lab experiments: evidence for anchoring over-optimistic expectations on price

H\"usler, Andreas, Didier Sornette and Cars Hommes ()

Papers from arXiv.org

Abstract: We analyze a controlled price formation experiment in the laboratory that shows evidence for bubbles. We calibrate two models that demonstrate with high statistical significance that these laboratory bubbles have a tendency to grow faster than exponential due to positive feedback. We show that the positive feedback operates by traders continuously upgrading their over-optimistic expectations of future returns based on past prices rather than on realized returns.

New Economics Papers: this item is included in nep-exp
Date: 2012-05
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://arxiv.org/pdf/1205.0635 Latest version (application/pdf)

Related works:
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: http://EconPapers.repec.org/RePEc:arx:papers:1205.0635

Access Statistics for this paper

More papers in Papers from arXiv.org
Series data maintained by arXiv administrators ().