To See Is To Believe: Common Expectations In Experimental Asset Markets
Stephen Cheung,
Morten Hedegaard and
Stefan Palan ()
No 2012-10, Working Papers from University of Sydney, School of Economics
Abstract:
We experimentally manipulate agents' information regarding the rationality of others in a setting in which previous studies have found irrationality to be present, namely the asset market experiments introduced by Smith, Suchanek, and Williams (Econometrica, 1988). Recent studies suggest that mispricing in such markets may be an artefact of confusion, which can be reduced by training subjects to understand the diminishing fundamental value. We reconsider this view, and argue that when it is made public knowledge that training has occurred, this may also reduce uncertainty over the behavior of others and facilitate the formation of common expectations. Our design disentangles the direct effect of training from the indirect e_ect of its public knowledge, and our results indicate a distinct effect of public knowledge over and above that of training alone
Keywords: common knowledge of rationality; price bubbles; asset market experiment (search for similar items in EconPapers)
Date: 2012-05
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 (12)
Downloads: (external link)
http://www.econ-wpseries.com/2012/201210.pdf
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.econ-wpseries.com:80 (No such host is known. )
Related works:
Journal Article: To see is to believe: Common expectations in experimental asset markets (2014) 
Working Paper: To See Is To Believe: Common Expectations in Experimental Asset Markets (2012) 
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:syd:wpaper:2123/8368
Access Statistics for this paper
More papers in Working Papers from University of Sydney, School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Vanessa Holcombe ().