EconPapers    
Economics at your fingertips  
 

Unleashing Animal Spirits - Self-Control and Overpricing in Experimental Asset Markets

Martin Kocher (), Konstantin Lucks and David Schindler ()
Additional contact information
Konstantin Lucks: LMU Munich

No 81, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: One explanation for overpricing on asset markets is a lack of traders\' self-control. Self-control is the individual capacity to override or inhibit undesired impulses that may drive prices. We implement the first experiment to address the causal relationship between self-control abilities and systematic overpricing on financial markets. Our setup can detect some of the channels through which individual self-control restrictions could transmit into irrational exuberance in markets. Our data indicate a large direct effect of restricted self-control abilities on market overpricing. Low self-control traders report stronger emotions after the market.

Keywords: behavioral finance; trader behavior; self-control; experimental asset markets; overpricing (search for similar items in EconPapers)
JEL-codes: G02 G11 G12 D53 D84 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp
Date: 2018-03-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
https://rationality-and-competition.de/wp-content/ ... cussion_paper/81.pdf (application/pdf)

Related works:
Working Paper: Unleashing Animal Spirits - Self-Control and Overpricing in Experimental Asset Markets (2016) Downloads
Working Paper: Unleashing Animal Spirits - Self-Control and Overpricing in Experimental Asset Markets (2016) Downloads
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:rco:dpaper:81

Access Statistics for this paper

More papers in Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition
Bibliographic data for series maintained by Benjamin Langer ().

 
Page updated 2019-04-07
Handle: RePEc:rco:dpaper:81