Super-exponential bubbles in lab experiments: Evidence for anchoring over-optimistic expectations on price

B-Tier
Journal: Journal of Economic Behavior and Organization
Year: 2013
Volume: 92
Issue: C
Pages: 304-316

Authors (3)

Hüsler, A. (not in RePEc) Sornette, D. (not in RePEc) Hommes, C.H. (Bank of Canada)

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We analyze a controlled price formation experiment in the laboratory that shows evidence for bubbles. We calibrate two models that demonstrate with high statistical significance that these laboratory bubbles have a tendency to grow faster than exponential due to positive feedback. We show that the positive feedback operates by traders continuously upgrading their over-optimistic expectations of future returns based on past prices rather than on realized returns.

Technical Details

RePEc Handle
repec:eee:jeborg:v:92:y:2013:i:c:p:304-316
Journal Field
Theory
Author Count
3
Added to Database
2026-02-02