Purpose – This paper aims to study how the trajectory of fundamental values affects price discovery in an experimental asset market. Design/methodology/approach – An experiment is conducted with two treatments, in which the time path of fundamentals differs between treatments. In the peak...

We create an experimental asset market in which we conduct share repurchases and share issues. Although the intrinsic value of the shares is independent of the quantity outstanding, the interventions result in changes in asset price. Specifically, we find the following. (1) A repurchase of...