The paper describes how two types of traders, marketmakers and speculators, establish their positions and manage their risk exposure. We show that balance sheets are insufficient to determine whether a trader is a marketmaker or a speculator.(...)

We investigate experimentally how the share of experienced traders in double-auction asset markets affects trading, in particular the occurrence of bubble-crash pricing patterns. In each session, six subjects trade in three successive market rounds and gain experience. In a fourth round,...