We present results of an experiment on expectation formation in an asset market. Participants to our experiment must … period ahead; in the Volatility treatment, we also elicit subjective confidence intervals of forecasts, which we take as a … measure of perceived volatility. The realized asset price is derived from a Walrasian market equilibrium equation with non …

more efficient and end-of-experiment imbalances common in SSW-markets are not observed. Our results demonstrate, that …

experiment that regularly produces valuation bubble and crash events. Global sessions involved real time trades between subjects …

Belief Equilibrium (RBE) for market volatility. It is argued that the theory of Rational Belief Equilibria (RBE) provides a … to balance between sellers and buyers leading to low market volatility. In short, the theory proposes that the GARCH …The purpose of this paper is to provide a non-technical exposition of the main conclusions of the theory of Rational …

Endogenous Uncertainty is that component of economic risk and market volatility which is propagated within the economy … by the beliefs and actions of agents. The theory of Rational Belief (see Kurz [1994]) permits rational agents to hold … Uncertainty. This paper shows that most of the observed volatility in financial markets is generated by the beliefs of the agents …