Please use this identifier to cite or link to this item: https://hdl.handle.net/10356/156713
Title: Reading the market? Expectation coordination and theory of mind in asset pricing experiments
Authors: Bao, Te
Füllbrunn, Sascha
Pei, Jiaoying
Zong, Jichuan
Keywords: Social sciences::General
Issue Date: 2022
Source: Bao, T., Füllbrunn, S., Pei, J. & Zong, J. (2022). Reading the market? Expectation coordination and theory of mind in asset pricing experiments. 2022 World Finance Conference, 1-40.
Project: RG 69/19 
NWJ-2020-003 
Abstract: Does the ability to ‘read the market’ homogenize expectations and, thus, reduce deviations from rational expectations equilibrium in learning to forecast experiments? To answer this question, we conducted a pre-registered quasi-experiment by composing the market groups based on the subject’s Theory of Mind (ToM) capabilities, elicited via the eye gaze test. On the aggregate level, we find the market with the highest ToM capabilities to form a price bubble that is about 40% smaller and coordinates better at about 75% on the price forecasts, compared to the group with the lowest ToM capabilities. However, we fail to find a significant effect between those groups comparing price and expectation dynamics.
URI: https://hdl.handle.net/10356/156713
URL: https://www.world-finance-conference.com/conference.php?id=23
Rights: © 2022 The Author(s). Published by World Finance Conference. All rights reserved. This paper was presented in 2022 World Finance Conference and is made available with permission of The Author(s).
Fulltext Permission: open
Fulltext Availability: With Fulltext
Appears in Collections:IGS Conference Papers
NEWRI Conference Papers
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