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We study the informational channel of financial contagion in the laboratory. In our experiment, two markets with … between asset prices is very close to that predicted by the theory. Finally, as theory predicts, there is no contagion when …
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We investigate how risk aversion (RA) shapes the informative content of prices in an experimental asset market, where traders are sorted according to their RA. RA should induce steeper individual demands and, under its most common parametrizations, drive equilibrium prices closer to revealing...
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This paper sets up an experimental asset market in the laboratory to investigate the effects of ambiguity on price formation and trading behavior in financial markets. The obtained trading data is used to analyze the effect of ambiguity on various market outcomes (the price level, volatility,...
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