Professor Jason Shachat jason.shachat@durham.ac.uk
Professor
Professor Jason Shachat jason.shachat@durham.ac.uk
Professor
H. Wang
S. Füllbrunn
Editor
E. Haruvy
Editor
We demonstrate when market experience is spaced out over a longer period of time (weeks instead of minutes), the increase in pricing efficiency is very small - if at all - for the same population of traders. However pricing efficiency gains are substantial for a situation involving new trader cohorts and a new asset. This is demonstrated via controlled laboratory experiments which implement a setting that commonly leads to the formulation of pricing bubbles. In our first study, we compare massed cohorts who complete a sequence of three markets in a single experimental session, and spacing cohorts whose sequence of three markets are spaced a week apart.Massed cohorts do not generate larger bubbles than spaced cohorts in the first two markets, and there is weak evidence that they do in the third market. In contrast we find in an exploratory study, experience gained through spaced repetitions rather than massed repetitions generates smaller bubbles when subjects are recruited to new cohorts and participate in a market for a different asset.
Shachat, J., & Wang, H. (2022). Are you experienced? How the time spacing of traders' market experience impacts bubble formation in experimental asset markets. In S. Füllbrunn, & E. Haruvy (Eds.), Handbook of Experimental Finance (267-280). Edward Elgar Publishing. https://doi.org/10.4337/9781800372337.00028
Online Publication Date | Oct 18, 2022 |
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Publication Date | 2022 |
Deposit Date | Aug 26, 2021 |
Publicly Available Date | Apr 18, 2023 |
Publisher | Edward Elgar Publishing |
Pages | 267-280 |
Book Title | Handbook of Experimental Finance |
ISBN | 9781800372320 |
DOI | https://doi.org/10.4337/9781800372337.00028 |
Public URL | https://durham-repository.worktribe.com/output/1653535 |
Contract Date | Aug 24, 2021 |
Accepted Book Chapter
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Copyright Statement
This is a draft chapter/article. The final version is available in Handbook of Experimental Finance edited by Füllbrunn, S. and Haruvy, E., published in 2022, Edward Elgar Publishing Ltd
https://doi.org/10.4337/9781800372337.00028
The material cannot be used for any other purpose without further permission of the publisher, and is for private use only.
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