Do markets correct individual behavioral biases? In an experimental asset market, we compare the outcomes of a standard market economy to those of a an island economy that removed market interactions. We observe asset price bubbles in the market economy while prices are stable in the island...

In an experimental setting in which investors can entrust their money to traders, we investigate how compensation schemes affect liquidity provision and asset prices. Investors face a trade-off between risk and return. At the benefit of a potentially higher return, they can entrust their money...

We investigate the relationship between anchoring and the emergence of bubbles in experimental asset markets. We show that setting a visual anchor at the fundamental value (FV) in the first period only is sufficient to eliminate or to significantly reduce bubbles in laboratory asset markets. If...

This paper reports that credit cycles emerged in laboratory economies that were not hit by aggregate shocks and in which information about fundamentals was perfect. This main result is in our view puzzling because standard theories predict that no cycles should have occurred in such a basic...

We study 6000 author-publication observations to investigate predictors of early career success in six fields of Economics. Concentrating on top researchers enables us to control for the effects of ability and effort, and focusing on the start of their careers minimizes distortions from...

We investigate the relationship between anchoring and the emergence of bubbles in experimental asset markets. We show that setting a visual anchor at the fundamental value (FV) in the first period only is sufficient to eliminate or to significantly reduce bubbles in laboratory asset markets. If...