Experience Does Not Eliminate Bubbles: Experimental Evidence

A-Tier
Journal: The Review of Financial Studies
Year: 2021
Volume: 34
Issue: 9
Pages: 4450-4485

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

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

Abstract

We study the role of investor experience in the formation of asset price bubbles. We conduct a call market experiment in which participants trade assets with each other and a learning-to-forecast experiment in which participants only forecast future prices (while trade based on these forecasts is computerized). Each experiment comprises three treatments varying the information that participants receive about the fundamental value. Each experimental market is repeated three times. Throughout, we observe sizable bubbles that persist despite participant experience. Our findings in the call market experiment contrast with those in the literature. Our findings in the learning-to-forecast experiment are novel.

Technical Details

RePEc Handle
repec:oup:rfinst:v:34:y:2021:i:9:p:4450-4485.
Journal Field
Finance
Author Count
3
Added to Database
2026-01-25