Download or read book Bubbles and Crashes in Experimental Asset Markets written by Stefan Palan and published by Springer Science & Business Media. This book was released on 2009-10-03 with total page 179 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book describes a laboratory experiment designed to test the causes and properties of bubbles in financial markets and explores the question whether it is possible to design markets which avoid such bubbles and crashes. In the experiment, subjects were given the opportunity to trade in a stock market modeled after the seminal work of Smith et al. (1988). To account for the increasing importance of online betting sites, subjects were also allowed to trade in a digital option market. The outcomes shed new light on how subjects form and update their expectations, placing special emphasis on the bounded rationality of investors. Various analytical bubble measures found in the literature are collected, calculated, classified and presented for the first time. The very interesting new bubble measures "Dispersion Ratio", "Overpriced Transactions" and "Underpriced Transactions" are developed, making the book an important step towards the research goal of preventing bubbles and crashes in financial markets.
Download or read book Bubbles and Crashes in Experimental Asset Markets written by Stefan Palan and published by Springer. This book was released on 2010-02-04 with total page 171 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book describes a laboratory experiment designed to test the causes and properties of bubbles in financial markets and explores the question whether it is possible to design markets which avoid such bubbles and crashes. In the experiment, subjects were given the opportunity to trade in a stock market modeled after the seminal work of Smith et al. (1988). To account for the increasing importance of online betting sites, subjects were also allowed to trade in a digital option market. The outcomes shed new light on how subjects form and update their expectations, placing special emphasis on the bounded rationality of investors. Various analytical bubble measures found in the literature are collected, calculated, classified and presented for the first time. The very interesting new bubble measures "Dispersion Ratio", "Overpriced Transactions" and "Underpriced Transactions" are developed, making the book an important step towards the research goal of preventing bubbles and crashes in financial markets.
Download or read book Bubbles and Crashes in Experimental Asset Markets written by Stefan Palan and published by Springer. This book was released on 2010-02-04 with total page 171 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book describes a laboratory experiment designed to test the causes and properties of bubbles in financial markets and explores the question whether it is possible to design markets which avoid such bubbles and crashes. In the experiment, subjects were given the opportunity to trade in a stock market modeled after the seminal work of Smith et al. (1988). To account for the increasing importance of online betting sites, subjects were also allowed to trade in a digital option market. The outcomes shed new light on how subjects form and update their expectations, placing special emphasis on the bounded rationality of investors. Various analytical bubble measures found in the literature are collected, calculated, classified and presented for the first time. The very interesting new bubble measures "Dispersion Ratio", "Overpriced Transactions" and "Underpriced Transactions" are developed, making the book an important step towards the research goal of preventing bubbles and crashes in financial markets.
Download or read book Essays on Bubbles and Crashes in Experimental Asset Markets written by Kun Zhang and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays on Bubbles and Crashes in Experimental Asset Markets written by Kun Zhang (Ph.D.) and published by . This book was released on 2015 with total page 432 pages. Available in PDF, EPUB and Kindle. Book excerpt: The main result is that team decision-making does not result in smaller price bubbles. However team decision-making result in less variance among markets (sessions). Further more, my experimental design allows us to record the chat dialogues, which enable us to have insight into team decision-making. The content of the messages allows us explore the reasons behind traders' asks and bids.
Download or read book Nonlinear Dynamics and Evolutionary Economics written by Richard Hollis Day and published by Oxford University Press, USA. This book was released on 1993 with total page 360 pages. Available in PDF, EPUB and Kindle. Book excerpt: Advances in physics, computers, and mathematics have made it possible to illustrate an astonishing array of potential behavior that can occur when nonlinear interactions are present. As Prigogine explains from a physicist's perspective, the fundamental role of instability and bounded rationality provide more precise understanding for evolution and changes. This volume considers these developments from various fields in the context of economic science. The work starts with a general non-mathematical discussion, introducing the major themes--nonlinearity, dynamical systems, and evolution in economic processes. The work continues with nonlinear analysis of macroeconomic growth and fluctuations. It describes analyses of economic adaptation, learning, and self-organization. The volume also scrutinizes a specific market--equities using nonlinear analysis, controlled experiments, and statistical inference when nonlinearity plays an essential role in data generation. The volume closes with an historical reflection by Richard Goodwin and a roundtable discussion on basic issues and new challenges in nonlinear economic dynamics.
Download or read book On Booms that Never Bust written by Brice Corgnet and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Bubbles in Asset Markets A critical valuation of experimental studies written by Daniel Hosp and published by GRIN Verlag. This book was released on 2012-09-11 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2012 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,00, University of Innsbruck, language: English, abstract: Bubbles in Asset Market gibt eine kurzen Überblick darüber, wie "Blasen" in Finanzmärkten entstehen könnne und wie deren Entstehung anhand von Experimenten bisher getestet wurde. Darauf aufbauen gibt es empfehlungen für eine geändertes Design der Experimente um bessre Ergebnisse erzielen zu können.
Download or read book Bubbles in Experimental Asset Markets written by Lucy F. Ackert and published by . This book was released on 2015 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: The robustness of bubbles and crashes in markets for finitely lived assets is perplexing. This paper reports the results of experimental asset markets in which participants trade two assets. In some markets, price bubbles form. In these markets, traders will pay even higher prices for the asset with lottery characteristics, i.e., a claim on a large, unlikely payoff. However, institutional design has a significant impact on deviations in prices from fundamental values, particularly for an asset with lottery characteristics. Price run-ups and crashes are moderated when traders finance purchases of the assets themselves and are allowed to short sell.
Download or read book Cognitive Bubbles written by Ciril Bosch-Rosa and published by . This book was released on 2017 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: Smith et al. (1988) reported large bubbles and crashes in experimental asset markets, a result that has been replicated many times. Here we test whether the occurrence of bubbles depends on the experimental subjects' cognitive sophistication. In a two-part experiment, we first run a battery of tests to assess the subjects' cognitive sophistication and classify them into low or high levels. We then invite them separately to two asset market experiments populated only by subjects with either low or high cognitive sophistication. We observe classic bubble and crash patterns in the sessions populated by subjects with low levels of cognitive sophistication. Yet, no bubbles or crashes are observed with our sophisticated subjects, indicating that cognitive sophistication of the experimental market participants has a strong impact on price efficiency.
Download or read book Experimental Asset Markets written by Owen Powell and published by . This book was released on 2015 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews new research on experimental asset markets, markets in which the value of the traded asset is homogeneous across all agents. Such markets have been shown to be prone to substantial mispricing, usually in the form of a bubble-and-crash pattern. This calls into question the efficiency of such markets. The studies reviewed consider how market efficiency is affected by the characteristics of traders (intelligence, knowledge, etc.), the properties of the traded asset (the time path of fundamental value, information provision, etc.), and the structure of the market (market interventions, compensation schemes, etc.). Finally, the paper summarizes with a discussion related to defining a unique measure of mispricing.
Download or read book Handbook of Experimental Economics Results written by Charles R. Plott and published by Elsevier. This book was released on 2008-08-21 with total page 1175 pages. Available in PDF, EPUB and Kindle. Book excerpt: While the field of economics makes sharp distinctions and produces precise theory, the work of experimental economics sometimes appears blurred and may produce uncertain results. The contributors to this volume have provided brief notes describing specific experimental results.
Download or read book Financial Market Bubbles and Crashes written by Harold L. Vogel and published by Springer Nature. This book was released on 2021-12-17 with total page 619 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economists broadly define financial asset price bubbles as episodes in which prices rise with notable rapidity and depart from historically established asset valuation multiples and relationships. Financial economists have for decades attempted to study and interpret bubbles through the prisms of rational expectations, efficient markets, equilibrium, arbitrage, and capital asset pricing models, but they have not made much if any progress toward a consistent and reliable theory that explains how and why bubbles (and crashes) evolve and are defined, measured, and compared. This book develops a new and different approach that is based on the central notion that bubbles and crashes reflect urgent short-side rationing, which means that, as such extreme conditions unfold, considerations of quantities owned or not owned begin to displace considerations of price.
Download or read book Asset Pricing Under Asymmetric Information written by Markus Konrad Brunnermeier and published by Oxford University Press, USA. This book was released on 2001 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: The role of information is central to the academic debate on finance. This book provides a detailed, current survey of theoretical research into the effect on stock prices of the distribution of information, comparing and contrasting major models. It examines theoretical models that explain bubbles, technical analysis, and herding behavior. It also provides rational explanations for stock market crashes. Analyzing the implications of asymmetries in information is crucial in this area. This book provides a useful survey for graduate students.
Download or read book Papers in Experimental Economics written by Vernon L. Smith and published by Cambridge University Press. This book was released on 1991-11-29 with total page 829 pages. Available in PDF, EPUB and Kindle. Book excerpt: A collection of the major papers of Vernon L. Smith, the main creator of the new field of experimental economics.
Download or read book Bubbles and Crashes written by Brent Goldfarb and published by Stanford University Press. This book was released on 2019-02-19 with total page 284 pages. Available in PDF, EPUB and Kindle. Book excerpt: “An interesting take on some factors that facilitate the development and bursting of bubbles in technology industries. . . . Highly recommended.” —Choice Financial market bubbles are recurring, often painful, reminders of the costs and benefits of capitalism. While many books have studied financial manias and crises, most fail to compare times of turmoil with times of stability. In Bubbles and Crashes, Brent Goldfarb and David A. Kirsch give us new insights into the causes of speculative booms and busts. They identify a class of assets—major technological innovations—that can, but does not necessarily, produce bubbles. This methodological twist is essential: Only by comparing similar events that sometimes lead to booms and busts can we ascertain the root causes of bubbles. Using a sample of eighty-eight technologies spanning 150 years, Goldfarb and Kirsch find that four factors play a key role in these episodes: the degree of uncertainty surrounding a particular innovation; the attentive presence of novice investors; the opportunity to directly invest in companies that specialize in the technology; and whether or not a technology is a good protagonist in a narrative. Goldfarb and Kirsch consider the implications of their analysis for technology bubbles that may be in the works today, offer tools for investors to identify whether a bubble is happening, and propose policy measures that may mitigate the risks associated with future speculative episodes.
Download or read book Psychological Perspectives on Financial Decision Making written by Tomasz Zaleskiewicz and published by Springer Nature. This book was released on 2020-07-21 with total page 367 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book reviews the latest research from psychology, neuroscience, and behavioral economics evaluating how people make financial choices in real-life circumstances. The volume is divided into three sections investigating financial decision making at the level of the brain, the level of an individual decision maker, and the level of the society, concluding with a discussion of the implications for further research. Among the topics discussed: Neural and hormonal bases of financial decision making Personality, cognitive abilities, emotions, and financial decisions Aging and financial decision making Coping methods for making financial choices under uncertainty Stock market crashes and market bubbles Psychological perspectives on borrowing, paying taxes, gambling, and charitable giving Psychological Perspectives on Financial Decision Making is a useful reference for researchers both in and outside of psychology, including decision-making experts, consumer psychologists, and behavioral economists.
