Advice in the Marketplace: A Laboratory Study

Jonathan Alevy () and Michael Price

No 2014-03, Experimental Economics Center Working Paper Series from Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University

Abstract: There is substantial evidence that the decisions of experienced and inexperienced agents differ in ways that impact both individual earnings and aggregate market outcomes. Typically, such evidence is gathered by studying experience as it accumulates within subjects. We examine a new question; whether behaviors associated with experience can be transferred directly to new market participants. Specifically, we study the intergenerational transmission of information, including direct advice, in experimental asset markets. Empirical results suggest that advice is a good substitute for experience; prices in sessions with advised traders shift towards fundamentals. Further, convergence towards fundamentals holds in mixed-markets where only a subset of traders are advised. Such data patterns are consistent with recent neurological evidence on fictive learning.

Keywords: asset markets; laboratory experiments; advice, fictive learning (search for similar items in EconPapers)
JEL-codes: C92 D83 G12 (search for similar items in EconPapers)
Pages: 42
Date: 2014-04
New Economics Papers: this item is included in nep-cbe and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2014-03.pdf (application/pdf)

Related works:
Journal Article: Advice in the marketplace: a laboratory study (2017)
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:exc:wpaper:2014-03

Access Statistics for this paper

More papers in Experimental Economics Center Working Paper Series from Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University Contact information at EDIRC.
Bibliographic data for series maintained by J. Todd Swarthout ().