Forecasting Skills in Experimental Markets: Illusion or Reality?

Brice Corgnet, Cary Deck (), Mark DeSantis () and David Porter
Additional contact information
Mark DeSantis: Chapman University

No 2020, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: Using experimental asset markets, we study the situation of a financial analyst who is trying to infer the fundamental value of an asset by observing the market’s history. We find that such capacity requires both standard cognitive skills (IQ) as well as social and emotional skills. However, forecasters with high emotional skills tend to perform worse when market mispricing is high as they tend to give too much emphasis to the noisy signals from market data. By contrast, forecasters with high social skills perform especially well in markets with high levels of mispricing in which their skills could help them detect possible manipulation attempts. Finally, males outperform females in the forecasting task after controlling for a large number of relevant individual characteristics such as risk attitudes, cognitive skills, emotional intelligence, and personality traits.

Keywords: Forecasting; experimental asset markets; theory of mind; personality traits; cognitive skills (search for similar items in EconPapers)
JEL-codes: C92 D91 G17 G41 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-exp, nep-neu and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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ftp://ftp.gate.cnrs.fr/RePEc/2020/2020.pdf (application/pdf)

Related works:
Journal Article: Forecasting Skills in Experimental Markets: Illusion or Reality? (2022)
Working Paper: Forecasting Skills in Experimental Market: Illusion or Reality? (2022)
Working Paper: Forecasting Skills in Experimental Markets: Illusion or Reality? (2020)
Working Paper: Forecasting Skills in Experimental Markets: Illusion or Reality? (2020)
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