Futures Contracting and Dividend Uncertainty in Experimental Asset Markets
David Porter and
The Journal of Business, 1995, vol. 68, issue 4, 509-41
Prices in experimental asset markets tend to bubble and then crash to dividend value at the end of the asset's useful life. Explanations for this phenomenon are (1) that participants cannot form reliable future price expectations or (2) dividend risk aversion. We report the results of experiments to test these hypotheses. In one experimental series, a futures market is introduced so that participants can obtain information on future share prices. In another series of experiments, the per-period dividend is known with certainty. The futures market treatment reduced the bubble. The certain dividend treatment had little effect on the character of bubbles with inexperienced traders. Copyright 1995 by University of Chicago Press.
References: Add references at CitEc
Citations: View citations in EconPapers (136) Track citations by RSS feed
Downloads: (external link)
http://dx.doi.org/10.1086/296675 full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ucp:jnlbus:v:68:y:1995:i:4:p:509-41
Access Statistics for this article
More articles in The Journal of Business from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().