implementation of profitable building projects. We present a novel laboratory experiment on the feasibility of TDR and simulate the …

bubbles in classical asset market experiments. Our setup is more realistic as it offers multiple securities that are … its rationality can be evaluated. Quick consensus emerges early yielding pronounced market bubbles. The overpricing …

bubbles. We consider a setting where participants sorted according to their degree of risk aversion trade in experimental … asset markets. We show that risk sorting is able to explain bubbles partially: Markets with the most risk-tolerant traders … exhibit larger bubbles than markets with the most risk averse traders. In our study risk aversion does not correlate with …

prevention of the persistent bubbles and crashes endemic to laboratory markets utilizing long-lived assets. Positive …

bubbles. We consider a setting where participants sorted according to their degree of risk aversion trade in experimental … asset markets. We show that risk sorting is able to explain bubbles partially: Markets with the most risk-tolerant traders … exhibit larger bubbles than markets with the most risk averse traders. In our study risk aversion does not correlate with …

premium, price-dividend ratio, and aggregate dividend and consumption growth. The model-implied risk free rate and price-dividend …

tradeoff between market and reinvestment risk explains this pattern. Intuitively, while long-term dividend claims are highly … exposed to market risk, they are also good hedges for reinvestment risk because dividend prices rise as expected returns … long maturities, inducing relatively low risk premia on long-term dividend claims. The model is also consistent with the …