Public Messages and Asset Prices

Adrian Stoian ()

Atlantic Economic Journal, 2014, vol. 42, issue 4, 454 pages

Abstract: We analyze the potential role of a public message as a coordination mechanism between traders in an experimental asset market that exhibits departures from fundamental values. Dividends are the same for all players except for an unknown ex-ante. During the treatment sessions, a message that does not offer new information is sent to all traders at the same predetermined time. We compare deviations from fundamental prices in sessions with and without a message. We find no statistical evidence that a public message without informational content is able to bring prices back to fundamental values. Copyright International Atlantic Economic Society 2014

Keywords: Bubble; Public message; Communication; Coordination; Central bank; C92; G12 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s11293-014-9431-5

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