How do experienced traders respond to inflows of inexperienced traders? An experimental analysis

Eizo Akiyama (), Nobuyuki Hanaki and Ryuichiro Ishikawa

Journal of Economic Dynamics and Control, 2014, vol. 45, issue C, 1-18

Abstract: We conducted asset market experiments where one experienced subject interacts with five inexperienced subjects to investigate how experienced subjects change their price forecasts and trading behavior when faced with strategic uncertainty caused by inflows of inexperienced subjects. Only half the experienced subjects initially forecasted prices deviating more from the fundamental values in the market with five inexperienced subjects than in the final round of the experiment in which they had previously participated. Furthermore, the majority of our experienced subjects did not change their trading behavior. Many experienced subjects act as price stabilizers when the inflow of inexperienced subjects is not associated with other changes in market conditions.

Keywords: Strategic uncertainty; Experience; Heterogeneity; Experiment; Asset markets (search for similar items in EconPapers)
JEL-codes: C90 D84 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (44)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165188914001158
Full text for ScienceDirect subscribers only

Related works:
Working Paper: How do experienced traders respond to inflows of inexperienced traders? An experimental analysis (2014)
Working Paper: How Do Experienced Traders Respond to Inflows of Inexperienced Traders? An Experimental Analysis (2013)
Working Paper: How Do Experienced Traders Respond to Inflows of Inexperienced Traders? An Experimental Analysis (2013)
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: https://EconPapers.repec.org/RePEc:eee:dyncon:v:45:y:2014:i:c:p:1-18

DOI: 10.1016/j.jedc.2014.05.007

Access Statistics for this article

Journal of Economic Dynamics and Control is currently edited by J. Bullard, C. Chiarella, H. Dawid, C. H. Hommes, P. Klein and C. Otrok

More articles in Journal of Economic Dynamics and Control from Elsevier
Bibliographic data for series maintained by Catherine Liu ().