Learning through passive participation in asset market bubbles

Cason, Timothy N.; Samek, Anya

doi:10.1007/s40881-015-0013-3

Cited by 14 publications

(4 citation statements)

References 33 publications

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“…We find that by manipulating the price chart such that the price is displayed at the upper end of the scale, overvaluation can be altered by more than 30 percentage points. Thus, we demonstrate that in a bubble-prone experimental asset market with a constant —similar to what Huber and Kirchler (2012), Baghestanian and Walker (2015), and Cason and Samek (2015), among others, have shown for markets with a decreasing —seemingly irrelevant design choices can considerably affect market prices. In contrast, we do not find evidence of a change in price efficiency when manipulating the price chart in the opposite direction.…”

Section: Discussionsupporting

confidence: 80%

“…Tufte 1983; Beattie and Jones 1992), there is also evidence that in market settings already a different presentation of trading prices and the prior to the experiment can influence experimental results. Cason and Samek (2015) for example find that the visual representation of trading prices—either displayed in a column of text or in a graphical display—leads to significantly different price levels. Huber and Kirchler (2012) demonstrate that bubble formation is significantly reduced when the process is displayed in a graph instead of a table prior to the experiment.…”

Section: Introductionmentioning

confidence: 99%

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Design-features of bubble-prone experimental asset markets with a constant FV

2019

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Experimental asset markets with a constant fundamental value () have grown in importance in recent years. A methodological examination of the robustness of experimental results in such a setting which has been shown to produce bubbles, however, is lacking. In a laboratory experiment with 280 subjects, we investigate whether specific design features are sufficient to influence experimental results. In detail, we (1) vary the visual representation of the price chart, and (2) provide subjects with full information about the FV process. We find overvaluation and bubble formation to be reduced when trading prices are displayed at the upper end of the price chart. Surprisingly, we do not find any effects when subjects have full information about the FV process.Electronic supplementary materialThe online version of this article (10.1007/s40881-019-00061-5) contains supplementary material, which is available to authorized users.

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Section: Discussionsupporting

confidence: 80%

Section: Introductionmentioning

confidence: 99%

Design-features of bubble-prone experimental asset markets with a constant FV

2019

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“…Second, Cason and Samek (2015) contains an example of results that switch to being significant under the alternative measurement variation. Part of this study compares markets in which information is shown to inexperienced traders as either text (T extM 1) or graphically (V isualM 1).…”

Section: Original Vs Suggested Mispricingmentioning

confidence: 99%

The Robustness of Mispricing Results in Experimental Asset Markets

Powell

Shestakova

2016

SSRN Journal

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Many experiments have been conducted on market mispricing, however there is a distinct lack of guidance over how mispricing should be measured. This raises concerns about the sensitivity of mispricing results to variations in the measurement procedure. In this paper, we investigate the robustness of previous results with respect to four variations: the choice of interval length, the use of the bid-ask spread as a price proxy, the choice of aggregation function, and controlling for observable market characteristics. While a majority of previous results are unaffected, roughly 30% do change significance.

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“…This study begins to fill this gap by analyzing three types of graphic displays to determine the extent to which each type of display regarding NPS pollution motivates pollution abatement. One prior study, Cason and Samek (), used an economic experiment to analyze the impacts of using data visualization tools in asset market bubbles. Though not related to NPS pollution, the study used an experimental design similar to ours involving exposing subjects to different types of information displays.…”

Section: Introductionmentioning

confidence: 99%

Addressing Social Dilemmas With Mascots, Information, and Graphics

et al. 2019

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Reducing nonpoint source pollution is a complex social dilemma involving externalities, information asymmetries, and coordination problems. Using a laboratory experiment, this research investigates how mascots, public information, and data visualization can improve collective group behavior to address a social dilemma. Results show that groups reduce pollution in the experiment when a community mascot expresses negative emotions in response to poor water quality outcomes. Additionally, groups pollute less when they are provided public information about water quality, and abatement is greater when feedback is negatively framed. This study demonstrates how novel nonmonetary incentives can be used to achieve a collective environmental goal. (JEL D79, Q25, Q52, Q53, D83)

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Learning through passive participation in asset market bubbles

Cited by 14 publications

References 33 publications

Design-features of bubble-prone experimental asset markets with a constant FV

Design-features of bubble-prone experimental asset markets with a constant FV

The Robustness of Mispricing Results in Experimental Asset Markets

Addressing Social Dilemmas With Mascots, Information, and Graphics

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