(A)symmetric information bubbles: Experimental evidence

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

Journal of Economic Dynamics and Control, 2020, vol. 110, issue C

Abstract: Asymmetric information has explained the existence of a bubble in extant theoretical models. This study experimentally analyzes traders’ choices with and without asymmetric information based on the riding-bubble model. We show that traders tend to hold a bubble asset for longer, thereby expanding the bubble in a market with symmetric, rather than asymmetric, information. However, when traders are more experienced, the size of the bubble decreases, in which case bubbles do not arise with symmetric information. By contrast, the size of the bubble is stable in a market with asymmetric information.

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: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
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)
Working Paper: Symmetric Information Bubbles: Experimental Evidence (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:110:y:2020:i:c:s0165188919301435

DOI: 10.1016/j.jedc.2019.103744

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