-like incentives on price formation and trading behavior. We observe (i) that option-like incentives induce significantly higher market … prices than linear incentives. We further find that (ii) option-like incentives provoke subjects to behave differently and to … take more risk than subjects with linear incentives. We finally show that (iii) trading at inflated prices is rational for …

the incentive scheme subjects face. In particular, prices of markets populated by subjects with bonus incentives show the … approximately rational as different incentives generate different optimal price levels. (iii) In markets where different subjects … have different incentive schemes we find that those with bonus incentives exhibit a riskier investment behavior and prefer …

-like incentives on price formation and trading behavior. We observe (i) that option-like incentives induce significantly higher market … prices than linear incentives. We further find that (ii) option-like incentives provoke subjects to behave differently and to … take more risk than subjects with linear incentives. We finally show that (iii) trading at inflated prices is rational for …

). We observe high mispricing in treatments with a declining fundamental value, while overvaluation emerges when coupled … gold mine" instead of "stocks") significantly reduces mispricing and overvaluation as it reduces confusion. -- experimental …