Positive expectations feedback experiments and number guessing games as models of financial markets

Joep Sonnemans () and Jan Tuinstra

Journal of Economic Psychology, 2010, vol. 31, issue 6, 964-984

Abstract: In repeated number guessing games choices typically converge quickly to the Nash equilibrium. In positive expectations feedback experiments, however, convergence to the equilibrium price tends to be very slow, if it occurs at all. Both types of experimental designs have been suggested as modeling essential aspects of financial markets. In order to isolate the source of the differences in outcomes we present several new experiments in this paper. We conclude that the feedback strength (i.e. the 'p-value' in standard number guessing games) is essential for the results.

Keywords: Behavioral; finance; Number; guessing; game; Beauty; contest; game; Expectations; feedback; systems (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (43)

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Related works:
Working Paper: Positive expectations feedback experiments and number guessing games as models of financial markets (2010)
Working Paper: Positive expectations feedback experiments and number guessing games as models of financial markets (2008)
Working Paper: Positive Expectations Feedback Experiments and Number Guessing Games as Models of Financial Markets (2008)
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