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, verifiability fails to yield efficiency in experiments with endogenous prices. We identify heterogeneous distributional preferences … as the main cause and design a parsimonious experiment with exogenous prices that allows classifying experts as either …
Persistent link: https://www.econbiz.de/10010294825
determinants for efficiency in credence goods markets. While theory predicts that either liability or verifiability yields … efficiency, we find that liability has a crucial, but verifiability only a minor effect. Allowing sellers to build up reputation …
Persistent link: https://www.econbiz.de/10010294835
experts make the predicted promise; (2) proper promises induce consumer-friendly behavior; and (3) higher interaction prices …
Persistent link: https://www.econbiz.de/10010294816
For the past two decades a market model introduced by Smith, Suchanek, and Williams (1988, henceforth SSW) has dominated experimental research on financial markets. In SSW the fundamental value of the traded asset is determined by the expected value of a finite stream of dividend payments. This...
Persistent link: https://www.econbiz.de/10010294788
To explore why bubbles frequently emerge in the experimental asset market model of Smith, Suchanek and Williams (1988), we vary the fundamental value process (constant or declining) and the cash-to-asset value-ratio (constant or increasing). We observe high mispricing in treatments with a...
Persistent link: https://www.econbiz.de/10010294824
We study price efficiency and trading behavior in laboratory limit order markets with asymmetrically informed traders. Markets differ in the number of insiders present and in the subset of traders who receive information about the number of insiders present. We observe that price efficiency (i)...
Persistent link: https://www.econbiz.de/10010397152