Working Paper Series
Bubbles and Experience: An Experiment on Speculation
(), Tobias Lindqvist and Evan Moore
Abstract: We investigate experimentally how the share of experienced
traders in double-auction asset markets affects trading, in particular the
occurrence of bubble-crash pricing patterns. In each session, six subjects
trade in three successive market rounds and gain experience. In a fourth
round, depending on the treatment, two or four experienced subjects are
replaced by inexperienced subjects. The results are compared to earlier
findings when all traders were either inexperienced or experienced. We
explore what can be learned by analogy between these laboratory findings
and the performance of naturally occurring markets.
Keywords: Asset Market; Bubble; Crash; Experience; Experiment; Speculation; (follow links to similar papers)
JEL-Codes: C92; G12; (follow links to similar papers)
25 pages, January 20, 2003
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