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The Role of the End Time in Experimental Asset Markets

Author

Listed:
  • Anita Kopányi-Peuker

    (Radboud University Nijmegen - Department of Economics)

  • Matthias Weber

    (University of St. Gallen - School of Finance)

Abstract

By now there are hundreds of scientific articles on experimental asset markets. Almost all of these experiments use a short and definite horizon. This may be one of the starkest differences to financial asset markets outside the laboratory, which usually have indefinite and comparatively long horizons. We analyze the role of the end time in an asset market experiment in which we vary the length of the horizon and whether the end time is definite or indefinite. We find recurring bubbles and similar price dynamics in all treatments (with moderately lower prices in the treatments with a long horizon).

Suggested Citation

  • Anita Kopányi-Peuker & Matthias Weber, 2022. "The Role of the End Time in Experimental Asset Markets," Swiss Finance Institute Research Paper Series 22-32, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp2232
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    File URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4089628
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    Cited by:

    1. John Duffy & Janet Hua Jiang & Huan Xie, 2021. "Pricing Indefinitely Lived Assets: Experimental Evidence," CIRANO Working Papers 2021s-32, CIRANO.

    More about this item

    Keywords

    Experimental finance; asset market experiments; time horizon; indefinite end time; bubbles;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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