Animal spirits in financial markets: Experimental evidence

Jukka Ilomäki and Hannu Laurila

Journal of Behavioral and Experimental Finance, 2018, vol. 20, issue C, 99-104

Abstract: The paper presents an experiment of stock market pricing that aims to test, whether animal spirits affect the price setting. In the experiment, the task of the subjects was to forecast the equilibrium price for the next period under differentiated information. The statistical analysis shows that animal spirits affect significantly the forecasting behavior of both informed and uninformed subjects. Furthermore, the animal spirits component reduces the realized cumulative returns for the informed subjects, and increases the realized cumulative returns for the uninformed subjects.

Keywords: Experiment; Stock returns; Portfolio choice; Forecasting behavior; Animal spirits (search for similar items in EconPapers)
JEL-codes: C93 G11 G12 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:20:y:2018:i:c:p:99-104

DOI: 10.1016/j.jbef.2018.08.005

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