Pooling, Separating, and Semiseparating Equilibria in Financial Markets: Some Experimental Evidence
AbstractThis study investigates experimental financial markets in which firms possess more information than do potential investors. Firms were given opportunities to undertake positive net present value projects which they could either forgo or finance by selling equity. Auctions were conducted among the investors for the right to finance the projects. When the theoretical equilibrium was unique, theory predicted well. When theory permitted pooling, separation, and semiseparation, only the more efficient pooling equilibrium was observed. The domination of the pooling equilibrium was robust to different experimental experiences by participants. When available, signals were used by good firms to distinguish themselves from bad. Article published by Oxford University Press on behalf of the Society for Financial Studies in its journal, The Review of Financial Studies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Society for Financial Studies in its journal Review of Financial Studies.
Volume (Year): 3 (1990)
Issue (Month): 3 ()
Contact details of provider:
Postal: Oxford University Press, Journals Department, 2001 Evans Road, Cary, NC 27513 USA.
Web page: http://www.rfs.oupjournals.org/
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Dorothea Kuebler, Wieland Mueller and Hans Normann, 2004.
"Job market signaling and screening: An experimental comparison,"
Royal Holloway, University of London: Discussion Papers in Economics
04/02, Department of Economics, Royal Holloway University of London, revised Apr 2004.
- Kübler, Dorothea & Müller, Wieland & Normann, Hans-Theo, 2008. "Job-market signaling and screening: An experimental comparison," Games and Economic Behavior, Elsevier, vol. 64(1), pages 219-236, September.
- Kübler, Dorothea & Müller, Wieland & Normann, Hans-Theo, 2005. "Job Market Signaling and Screening: An Experimental Comparison," IZA Discussion Papers 1794, Institute for the Study of Labor (IZA).
- Kübler, D. & Müller, W. & Normann, H.T., 2003. "Job Market Signalling and Screening: An Experimental Comparison," Discussion Paper 2003-124, Tilburg University, Center for Economic Research.
- Potters, J.J.M. & Winden, F.A.A.M. van, 1996.
"Comparative statics of a signaling game: An experimental study,"
Open Access publications from Tilburg University
urn:nbn:nl:ui:12-73374, Tilburg University.
- Potters, Jan & van Winden, Frans, 1996. "Comparative Statics of a Signaling Game: An Experimental Study," International Journal of Game Theory, Springer, vol. 25(3), pages 329-53.
- Potters, J.J.M. & Winden, F. van, 1995. "Comparative statics of a signaling game: An experimental study," Discussion Paper 1995-126, Tilburg University, Center for Economic Research.
- Lisa L. Posey & Abdullah Yavas, 2007.
"Screening equilibria in experimental markets,"
The Geneva Risk and Insurance Review,
Palgrave Macmillan, vol. 32(2), pages 147-167, December.
- Aleksander Berentsen & Michael McBride & Guillaume Rocheteau, 2013. "Limelight on dark markets: an experimental study of liquidity and information," ECON - Working Papers 126, Department of Economics - University of Zurich.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.