EconPapers    
Economics at your fingertips  
 

Irrationality and beliefs in a laboratory asset market: Is it me or is it you?

Lucy Ackert (), Brian D. Kluger and Li Qi
Authors registered in the RePEc Author Service: Qi Li and Li Qi ()

Journal of Economic Behavior & Organization, 2012, vol. 84, issue 1, 278-291

Abstract: This paper reports on an experiment designed to examine individual and market outcomes with a mixture of rational and non-rational traders. Using values elicited via auctions, we measure a specific form of irrationality: the tendency to overweight high payoff, low probability events, or probability judgment error. Subjects are classified by their tendency to exhibit errors, as well as their beliefs regarding whether others will make errors. Subjects then participate in a series of double auction markets. The results indicate that both probability judgment error and beliefs about other subjects’ susceptibility to probability judgment error have significant impact on individual and market outcomes.

Keywords: Irrationality; Probability Judgment error; Asset price bubbles (search for similar items in EconPapers)
JEL-codes: C90 G10 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268112000698
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:84:y:2012:i:1:p:278-291

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Neilson, William Stuart

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

 
Page updated 2018-06-18
Handle: RePEc:eee:jeborg:v:84:y:2012:i:1:p:278-291