The Bubble Game: An Experimental Study of Speculation

Sophie Moinas and Sébastien Pouget ()
Additional contact information
Sébastien Pouget: Finance - CRM - Centre de Recherche en Management - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - IAE - Institut d'Administration des Entreprises - Toulouse - CNRS - Centre National de la Recherche Scientifique

Post-Print from HAL

Abstract: We propose a bubble game that involves sequential trading of an asset commonly known to be valueless. Because no trader is ever sure to be last in the market sequence, the game allows for a bubble at the Nash equilibrium when there is no cap on the maximum price. We run experiments both with and without a price cap. Structural estimation of behavioral game theory models suggests that quantal responses and analogy-based expectations are important drivers of speculation.

Keywords: Rational bubbles; irrational bubbles; experiments; cognitive hierarchy model; quantal response equilibrium; analogy-based expectation equilibrium; "Rational bubbles"; "irrational bubbles"; "experiments"; "cognitive hierarchy model"; "quantal response equilibrium"; "analogy-based expectation equilibrium" (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (38)

Published in Econometrica, 2013, 81 (4), pp.1507-1539. ⟨10.3982/ECTA9433⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: The Bubble Game: An Experimental Study of Speculation (2013)
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:hal:journl:halshs-00862395

DOI: 10.3982/ECTA9433

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().