Experimental asset markets: A survey of recent developments

Powell, Owen; Shestakova, Natalia

doi:10.1016/j.jbef.2016.08.003

Cited by 69 publications

(33 citation statements)

References 88 publications

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“…The formation of speculative bubbles has long been a focus of the field of experimental economics. In a recent review of the literature, Powell and Shestakova (2016) report that the literature finds that receiving more information on dividends leads to less bubble formation.…”

Section: Methodsmentioning

confidence: 99%

Does Corporate Social Responsibility Reporting Lead to Less Speculative Trading?

Gregory¹

2019

IJEF

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Section: Methodsmentioning

confidence: 99%

Does Corporate Social Responsibility Reporting Lead to Less Speculative Trading?

Gregory¹

2019

IJEF

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“…An additional aim of the present study was to investigate whether different types of incentives proposed to participants to perform experimental tasks lead to compatible results. This topic has gained a lot of attention in experimental economics and resulted in a large literature (see [ 6 , 36 ] for reference). In economic thinking, the true behaviour can only be elicited if the appropriate monetary incentive is applied.…”

Section: Preliminary Considerationsmentioning

confidence: 99%

Behavioural Effects and Market Dynamics in Field and Laboratory Experimental Asset Markets

Andraszewicz

Sornette

2020

Entropy

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A vast literature investigating behavioural underpinnings of financial bubbles and crashes relies on laboratory experiments. However, it is not yet clear how findings generated in a highly artificial environment relate to the human behaviour in the wild. It is of concern that the laboratory setting may create a confound variable that impacts the experimental results. To explore the similarities and differences between human behaviour in the laboratory environment and in a realistic natural setting, with the same type of participants, we translate a field study conducted by reference (Sornette, D.; et al. Econ. E-J.2020, 14, 1–53) with trading rounds each lasting six full days to a laboratory experiment lasting two hours. The laboratory experiment replicates the key findings from the field study but we observe substantial differences in the market dynamics between the two settings. The replication of the results in the two distinct settings indicates that relaxing some of the laboratory control does not corrupt the main findings, while at the same time it offers several advantages such as the possibility to increase the number of participants interacting with each other at the same time and the number of traded securities. These findings pose important insights for future experiments investigating human behaviour in complex systems.

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“…2 See also Powell and Shestakova (2016) and Nuzzo and Morone (2017) for a more recent survey of this rapidly growing body of literature.…”

Section: Introductionmentioning

confidence: 99%

Effects of different ways of incentivizing price forecasts on market dynamics and individual decisions in asset market experiments

Hanaki

Akiyama

Ishikawa

2018

Journal of Economic Dynamics and Control

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In this study, we investigate (a) whether eliciting future price forecasts influences market outcomes and (b) whether differences in the way in which subjects are incentivized to submit "accurate" price forecasts influence market outcomes as well as the forecasts in an experimental asset market. We consider four treatments: one without forecast elicitation and three with forecast elicitation. In two of the treatments with forecast elicitation, subjects are paid based on their performance in both forecasting and trading, while in the other treatment with forecast elicitations, they are paid based on only one of those factors, which is chosen randomly at the end of the experiment. We found no significant effect of forecast elicitation on market outcomes in the latter case. Thus, to avoid influencing the behavior of subjects and market outcomes by eliciting price forecasts, paying subjects based on either forecasting or trading performance chosen randomly at the end of the experiment is better than paying them based on both. In addition, we consider forecast-only experiments: one in which subjects are rewarded based on the number of accurate forecasts and the other in which they are rewarded based on a quadratic scoring rule. We found no significant difference in terms of forecasting performance between the two.

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Experimental asset markets: A survey of recent developments

Cited by 69 publications

References 88 publications

Does Corporate Social Responsibility Reporting Lead to Less Speculative Trading?

Does Corporate Social Responsibility Reporting Lead to Less Speculative Trading?

Behavioural Effects and Market Dynamics in Field and Laboratory Experimental Asset Markets

Effects of different ways of incentivizing price forecasts on market dynamics and individual decisions in asset market experiments

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