Please use this identifier to cite or link to this item: https://hdl.handle.net/10356/154889
Title: Coordination on Bubbles In Large-Group Asset Pricing Experiments
Authors: Bao, Te
Hennequin, Myrna
Hommes, Cars
Massaro, Domenico
Keywords: Social sciences::Economic theory
Issue Date: 2020
Source: Bao, T., Hennequin, M., Hommes, C. & Massaro, D. (2020). Coordination on Bubbles In Large-Group Asset Pricing Experiments. Journal of Economic Dynamics and Control, 110, 103702-. https://dx.doi.org/10.1016/j.jedc.2019.05.009
Project: RG68/16
Journal: Journal of Economic Dynamics and Control
Abstract: We present a large-group experiment in which participants predict the price of an asset, whose realization depends on the aggregation of individual forecasts. The markets consist of 21 to 32 participants, a group size larger than in most experiments. Multiple large price bubbles occur in six out of seven markets. The bubbles emerge even faster than in smaller markets. Individual forecast errors do not cancel out at the aggregate level, but participants coordinate on a trend-following prediction strategy that gives rise to large bubbles. The observed price patterns can be captured by a behavioral heuristics switching model with heterogeneous expectations.
URI: https://hdl.handle.net/10356/154889
ISSN: 0165-1889
DOI: 10.1016/j.jedc.2019.05.009
Rights: © 2019 Elsevier B.V. All rights reserved.
Fulltext Permission: none
Fulltext Availability: No Fulltext
Appears in Collections:SSS Journal Articles

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