Bubbles and Experience: An Experiment on Speculation

Martin Dufwenberg, Tobias Lindqvist () and Evan Moore ()
Additional contact information
Evan Moore: Auburn University Montgomery, Postal: P.O. Box 244023,Montgomery, AL 36124-4023, U.S.

No 588, Working Paper Series from Research Institute of Industrial Economics

Abstract: We investigate experimentally how the share of experienced traders in double-auction asset markets affects trading, in particular the occurrence of bubble-crash pricing patterns. In each session, six subjects trade in three successive market rounds and gain experience. In a fourth round, depending on the treatment, two or four experienced subjects are replaced by inexperienced subjects. The results are compared to earlier findings when all traders were either inexperienced or experienced. We explore what can be learned by analogy between these laboratory findings and the performance of naturally occurring markets.

Keywords: Asset Market; Bubble; Crash; Experience; Experiment; Speculation (search for similar items in EconPapers)
JEL-codes: C92 G12 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2003-01-20
New Economics Papers: this item is included in nep-cfn, nep-fin, nep-mfd, nep-pke and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Bubbles and Experience: An Experiment on Speculation (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0588

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