Bubbles are omnipresent in lab experiments with asset markets. Most of these experiments were conducted in environments … smaller bubbles if human traders expect algorithmic traders to be present. …

Bubbles are omnipresent in lab experiments with asset markets. But these experiments were (mostly) conducted in … clearly smaller bubbles if human traders expect algorithmic traders to be present. …

, while rational agents anticipate market crashes after large bubbles and drive prices back close to fundamental value …

We develop a model of rational bubbles based on leverage and the assumption of an imprecisely known maximum market size … lend to traders with limited liability in a bubble is endogenous. Bubbles reduce welfare of future investors. We provide … general conditions for the possibility of bubbles depending on uncertainty about market size, traders' degree of leverage and …