Assuming investors are loss averse, repeated risky investments are less attractive inmyopic evaluation. A theoretical foundation for this effect is given by the behavioralconcept of myopic loss aversion (MLA). The consequences of MLA have been confirmedin several between-subject experimental...

For loss averse investors, a sequence of risky investments looks less attractive if it is evaluated myopically — an effect called myopic loss aversion (MLA). The consequences of this effect have been confirmed in several experiments and its robustness is largely undisputed. The effect's...

This paper investigates the effect of monetary policy on stock market bubbles and trading behavior in experimental asset markets. For this purpose, we introduce the possibility of investing in interest bearing bonds to the widely used laboratory asset market design of Smith, Suchanek, and...

What people perceive as risk clearly goes beyond variance. Several papers have shown that, e.g., probability of loss plays a more prominent role in perceived risk than does variance. We are the first to explore how individual risk perception influences prices and trading behavior in a market...

Greed has been shown to be an important economic motive. Both the popular press as well as scientific papers have mentioned questionable practices by greedy bankers and investors as one of the root causes of the 2008 global financial crisis. In spite of these suggestions, there is as of yet no...

We investigate the relation between the motive of greed and several asset market indicators such as trading activity and bubble formation in the form of mispricing, overpricing, and price amplitude. To that end, we run experiments in which we are able to measure individuals’ greed and create...