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Price bubbles, gender, and expectations in experimental asset markets

Charles Holt (), Megan Porzio and Michelle Yingze Song

European Economic Review, 2017, vol. 100, issue C, 72-94

Abstract: This paper reports results of laboratory markets for a risky asset with a “flat” fundamental value that equates expected dividends to the return on a safe asset. Subjects were sorted by gender in an unobtrusive manner, and bubbles in this setting are pervasive and of comparable magnitude for both genders. In contrast, a robustness check done with a declining fundamental value did generate larger bubbles for groups of males. Elicited price forecasts tend to trail share prices as they rise and exceed prices as they fall, a pattern that is tracked by a “double adaptive” forecasting model.

Keywords: Price bubbles; Gender; Asset markets; Forecasting; Adaptive expectations; Risk aversion; Cognitive abilities; Laboratory experiments (search for similar items in EconPapers)
JEL-codes: C92 D81 D84 G02 J16 (search for similar items in EconPapers)
Date: 2017
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