We study the emergence of bubbles in a laboratory experiment with large groups of individuals. The realized price is … findings are: (i) large asset bubbles occur in large groups, (ii) information contagion through news affects behaviour and may … and crashes, and (iv) bubbles are strongly amplified by coordination on trend-extrapolation …

depends on a time-scale. We use this hitherto neglected aspect to propose a new definition of bubbles that does not rely on …, bubbles are a violation of market efficiency with respect to its time-scale …

We propose an extension of the class of rational expectations bubbles (REBs) to the more general rational beliefs … beliefs can thus account for speculative bubbles, without the need for irrational agents or limits to arbitrage. Many of the … shortcomings of REBs that make rational bubbles implausible can be overcome once we relax the ergodicity requirement. In particular …

". We observe both stable markets and large bubbles for both small and large markets. The data analysis shows no differences … successfully drives prices back towards the fundamental, but we observe very large bubbles in which the news apparently has no …

jumps and price bubbles. We derive a generalized intertertemporal CAPM and consumption CAPM for these markets. The derived … depends on the existence of price bubbles, and in the number and quantity of systematic risk factors …

Rational bubbles in stocks can cause increases in trading volume, even after accounting for their expansionary effect …. Bubbles, on the contrary, do not produce dividends and require more rebalancing after a bad shock …

reswitching activities and short-term thinking of bounded rational investors. Negative bubbles (market prices lower than … fundamentals) tend to occur if active portfolio managers exhibit high risk aversion, but are less frequent than positive bubbles …. -- stock; market ; passive; trading ; financial; stability ; arbitrage ; trading ; financial ; bubbles ; Heterogeneous ; Agent …

Smith et al. (1988) reported large bubbles and crashes in experimental asset markets, a result that has been replicated … many times. Here we test whether the occurrence of bubbles depends on the experimental subjects' cognitive sophistication … subjects with low levels of cognitive sophistication. Yet, no bubbles or crashes are observed with our sophisticated subjects …