Experience Does Not Eliminate Bubbles: Experimental Evidence

Anita Kopányi-Peuker, Matthias Weber and Lauren Cohen

The Review of Financial Studies, 2021, vol. 34, issue 9, 4450-4485

Abstract: We study the role of investor experience in the formation of asset price bubbles. We conduct a call market experiment in which participants trade assets with each other and a learning-to-forecast experiment in which participants only forecast future prices (while trade based on these forecasts is computerized). Each experiment comprises three treatments varying the information that participants receive about the fundamental value. Each experimental market is repeated three times. Throughout, we observe sizable bubbles that persist despite participant experience. Our findings in the call market experiment contrast with those in the literature. Our findings in the learning-to-forecast experiment are novel.

JEL-codes: C92 D90 G10 G40 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (20)

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Related works:
Working Paper: Experience Does not Eliminate Bubbles: Experimental Evidence (2018)
Working Paper: Experience Does not Eliminate Bubbles: Experimental Evidence (2018)
Working Paper: Experience Does not Eliminate Bubbles: Experimental Evidence (2018)
Working Paper: Experience Does not Eliminate Bubbles: Experimental Evidence (2018)
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