This is the first paper to test the asset pricing implication of leverage in a laboratory. We show that as theory … predicts, leverage increases asset prices: When an asset can be used as collateral (that is, when the asset can be bought on …

This is the first paper to test the asset pricing implication of leverage in a laboratory. We show that as theory … predicts, leverage increases asset prices: when an asset can be used as collateral (i.e., when the asset can be bought on …

We study default and endogenous leverage in the laboratory. To this purpose, we develop a general equilibrium model of … collateralized borrowing amenable to laboratory implementation and gather experimental data. In the model, leverage is endogenous …

We study default and endogenous leverage in the laboratory. To this purpose, we develop a general equilibrium model of … collateralized borrowing amenable to laboratory implementation and gather experimental data. In the model, leverage is endogenous …

leverage by studying a model that simultaneously describes dynamic and equilibrium properties of the market. Rather than taking … important because the economics of leverage is key to the understanding of financial crisis. We find that simulated double … assets are traded at a price above fundamental value in the double auction. The equilibrium level of leverage also emerges in …