A Collection of Surveys on Market Experiments

Noussair, Charles; Tucker, Steven

doi:10.1002/9781118790700.ch1

Cited by 2 publications

(1 citation statement)

References 13 publications

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“…However, as lab experiments are generally performed with students who might not have significant investment experience, their external validity is often questioned by the practitioners. Despite limited external validity, lab experiments with student subjects are extensively used in the existing behavioral finance and economics literature to achieve an enhanced understanding of the decision process of individual investors under various scenarios (for details please see the survey papers of Duxbury, 1995Duxbury, , 2015Noussair & Tucker, 2013 that summarize numerous experiments on the individual investment decisions and asset markets using student subjects). Due to the aforementioned advantages of the lab experiments and their extensive usage in the existing literature, this study also relies on the experimental methodology.…”

Section: Experimental Methodologymentioning

confidence: 99%

Individual Investments Biased by the Size of a Foreign Investor: An Experimental Study

Umer

Ahmed

Jadoon

2021

OMEE

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The field of behavioral finance has actively researched behavioral elements influencing the choices of individual investors. This study also contributes to the behavioral finance and examines the effect of an increase in a foreign firm’s partial ownership in a domestic firm on the local individual investments in that domestic firm. Specifically, using a controlled lab experiment the study examines the investments of Pakistani individual investors between a purely Pakistani firm and a Pakistani firm with three different levels of Chinese ownership (portfolio, minority, majority). The experimental results show that with reference to Chinese minority ownership in a Pakistani firm, the potential investors are 47% (61%) less likely to invest in a Pakistani firm with Chinese portfolio (majority) ownership than in a purely Pakistani firm. The study uncovers an important non-monetary factor in the form of a foreign firm’s partial ownership that can significantly influence the choices of individual investors. It also makes an important contribution to the growing literature on the Chinese foreign investments specifically in Pakistan by exploring how potential individual Pakistani investors are likely to react to an increase in Chinese investments in Pakistani firms.

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Section: Experimental Methodologymentioning

confidence: 99%

Individual Investments Biased by the Size of a Foreign Investor: An Experimental Study

Umer

Ahmed

Jadoon

2021

OMEE

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Reconsidering Rational Expectations and the Aggregation of Diverse Information in Laboratory Security Markets

et al. 2019

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The ability of markets to aggregate diverse information is a cornerstone of economics and finance, and empirical evidence for such aggregation has been demonstrated in previous laboratory experiments. Most notably Plott and Sunder (1988) find clear support for the rational expectations hypothesis in their Series B and C markets. However, recent studies have called into question the robustness of these findings. In this paper, we report the result of a direct replication of the key information aggregation results presented in Plott and Sunder. We do not find the same strong evidence in support of rational expectations that Plott and Sunder report suggesting information aggregation is a fragile property of markets.

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A Collection of Surveys on Market Experiments

Cited by 2 publications

References 13 publications

Individual Investments Biased by the Size of a Foreign Investor: An Experimental Study

Individual Investments Biased by the Size of a Foreign Investor: An Experimental Study

Reconsidering Rational Expectations and the Aggregation of Diverse Information in Laboratory Security Markets

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