Designing Call Auction Institutions to Eliminate Price Bubbles: Is English Dutch the Best?

Cary Deck (), Maroš Servátka and Steven Tucker

Working Papers from Chapman University, Economic Science Institute

Abstract: The bubble and burst pattern in asset market experiments is among the most replicable results in experimental economics. Numerous studies have searched for means to reduce this mispricing. Using controlled laboratory experiments, we compare mispricing in standard double auction markets to prices in two clock auctions. The double Dutch auction, shown to be more efficient than the double auction in commodity market experiments, does not eliminate bubbles. However, the English Dutch auction does yield prices reflective of underlying fundamentals and succeeds in taming bubbles even with inexperienced traders in the common declining fundamental value environment.

Keywords: Asset Markets; Experimental Economics; Institutional Design (search for similar items in EconPapers)
JEL-codes: C91 D02 D14 G12 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-des, nep-exp and nep-hpe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://digitalcommons.chapman.edu/esi_working_papers/266/

Related works:
Journal Article: Designing Call Auction Institutions to Eliminate Price Bubbles: Is English Dutch the Best? (2020)
Working Paper: Designing Call Auction Institutions to Eliminate Price Bubbles: Is English Dutch the Best? (2019)
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:chu:wpaper:19-06

Access Statistics for this paper

More papers in Working Papers from Chapman University, Economic Science Institute Contact information at EDIRC.
Bibliographic data for series maintained by Megan Luetje ().