Super-exponential bubbles in lab experiments: evidence for anchoring over-optimistic expectations on price
| Authors |
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| Publication date | 2013 |
| Journal | Journal of Economic Behavior & Organization |
| Volume | Issue number | 92 |
| Pages (from-to) | 304-316 |
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| 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. |
| Document type | Article |
| Language | English |
| Published at | https://doi.org/10.1016/j.jebo.2013.06.005 |
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