Bubbles in hybrid markets: How expectations about algorithmic trading affect human trading
Mike Farjam and
Oliver Kirchkamp ()
Journal of Economic Behavior & Organization, 2018, vol. 146, issue C, 248-269
Bubbles are omnipresent in lab experiments with asset markets. Most of these experiments are conducted in environments with only human traders. Since today's markets are substantially determined by algorithmic trading, we use a laboratory experiment to measure how human trading depends on the expected presence of algorithmic traders. We find that bubbles are clearly smaller when human traders expect algorithmic traders to be present.
Keywords: Bubbles; Expectations; Experiment; Algorithmic traders (search for similar items in EconPapers)
JEL-codes: C92 G02 (search for similar items in EconPapers)
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Working Paper: Bubbles in Hybrid Markets - How Expectations about Algorithmic Trading Affect Human Trading (2015)
Working Paper: Bubbles in hybrid markets - How expectations about algorithmic trading affect human trading (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:146:y:2018:i:c:p:248-269
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