Bubbles in asset markets have been documented in numerous experimental studies. However, all experiments in which … bubbles occur pay dividends after each trading day. In this paper we study whether bubbles can occur in markets without … may have inside information, and (2) the option to communicate with other traders. We find that bubbles can indeed occur …

limited liability investors contribute to asset price bubbles by increasing liquidity provision and that caps fail to tame … bubbles. Overall, giving investors skin in the game fosters financial stability. …