Efficient market models cannot explain the high level of trading in financial markets in terms of asset portfolio adjustment. It is presumed that much of this excessive trading is irrational noise trading. A corollary is that there must either be irrational traders in the market or rational...

We conducted a lab experiment with 253 participants to examine how constraints on bonus akin to bonus regulations, such as bonus cap and malus, could affect individuals' risk-taking in the presence of relative performance pay. Participants took greater risks when bonus was linked to investment...