This experiment compares the price dynamics and bubble formation in an asset market with a price adjustment rule in …, recurring bubbles arise, where the price is 3 times larger than the fundamental value, which were not seen in former experiments. …

We investigate the relationship between anchoring and the emergence of bubbles in experimental asset markets. We show … significantly reduce bubbles in laboratory asset markets. If no FV-anchor is set, bubble-crash patterns emerge. Our results indicate … that bubbles in laboratory environments are primarily sparked in the first period. If prices are initiated around the FV …

We study the formation of price bubbles on experimental asset markets where cash earns interest. There are two main … conclusions. The first is that paying positive interest on cash is ineffective in diminishing bubbles through the reducing …-active-participation channel. The second is that the fundamental value generating process plays a critical role in the formation of asset bubbles …