Bubbles in asset markets and the heterogeneity of beliefs

Eizo Akiyama, Yukihiko Funaki, Ryuichiro Ishikawa, Yaron Lahav and Charles Noussair

Journal of Economic Behavior & Organization, 2025, vol. 236, issue C

Abstract: We examine the relationship between belief heterogeneity and transaction volume in asset markets. In a laboratory experiment, we elicit long-term beliefs from traders about future prices and make different subsets of the belief information common knowledge, depending on the treatment. There is a strong tendency for traders to adjust their beliefs toward the median belief in their market. There is no effect of making belief information public on transaction volume. Surprisingly to us, however, making the median price prediction for the entire future time horizon common knowledge greatly reduces mispricing

Keywords: Beliefs; Experiment; Public information; Mispricing (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268125002367
Full text for ScienceDirect subscribers only

Related works:
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:jeborg:v:236:y:2025:i:c:s0167268125002367

DOI: 10.1016/j.jebo.2025.107117

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().