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A Review of Research into Smith, Suchanek and Williams Markets

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  • Stefan Palan

    ()
    (Institute of Banking and Finance, Karl-Franzens-University Graz
    Department of Banking and Finance, Leopold-Franzens-University Innsbruck)

Abstract

This article discusses the literature on bubbles and crashes in the most commonly used experimental asset market design, introduced by Smith, Suchanek and Williams (1988). It documents the main findings based on the results from 33 published articles and 25 working papers. The qualitative analysis and interpretation is furthermore complemented by summary statistics from an extensive database of close to 1600 individual bubble measure observations.

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File URL: http://static.uni-graz.at/fileadmin/sowi/Pics/2013-04_Palan_01.pdf
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Bibliographic Info

Paper provided by Faculty of Social and Economic Sciences, Karl-Franzens-University Graz in its series Working Paper Series, Social and Economic Sciences with number 2013-04.

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Length: 33 pages
Date of creation: 12 Jun 2013
Date of revision:
Handle: RePEc:grz:wpsses:2013-04

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References

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  1. Julija Michailova & Ulrich Schmidt, 2011. "Overconfidence and Bubbles in Experimental Asset Markets," Kiel Working Papers 1729, Kiel Institute for the World Economy.
  2. Cheung, Stephen L. & Hedegaard, Morten & Palan, Stefan, 2012. "To See Is To Believe: Common Expectations in Experimental Asset Markets," IZA Discussion Papers 6922, Institute for the Study of Labor (IZA).
  3. Cheung, Stephen L. & Coleman, Andrew, 2012. "League-Table Incentives and Price Bubbles in Experimental Asset Markets," Working Papers 2012-13, University of Sydney, School of Economics.
  4. Harrison, J Michael & Kreps, David M, 1978. "Speculative Investor Behavior in a Stock Market with Heterogeneous Expectations," The Quarterly Journal of Economics, MIT Press, vol. 92(2), pages 323-36, May.
  5. Charles N. Noussair & Owen Powell, 2010. "Peaks and valleys: Price discovery in experimental asset markets with non-monotonic fundamentals," Journal of Economic Studies, Emerald Group Publishing, vol. 37(2), pages 152-180, May.
  6. Brice Corgnet & Praveen Kujal & David Porter, 2010. "The effect of reliability, content and timing of public announcements on asset trading behavior," Economics Working Papers we101204, Universidad Carlos III, Departamento de Economía.
  7. AJ A. Bostian & Charles A. Holt, 2009. "Price Bubbles with Discounting: A Web-Based Classroom Experiment," The Journal of Economic Education, Taylor & Francis Journals, vol. 40(1), pages 27-37, January.
  8. Lei, Vivian & Noussair, Charles N & Plott, Charles R, 2001. "Nonspeculative Bubbles in Experimental Asset Markets: Lack of Common Knowledge of Rationality vs. Actual Irrationality," Econometrica, Econometric Society, vol. 69(4), pages 831-59, July.
  9. Porter, David P & Smith, Vernon L, 1995. "Futures Contracting and Dividend Uncertainty in Experimental Asset Markets," The Journal of Business, University of Chicago Press, vol. 68(4), pages 509-41, October.
  10. Mark van Boening & Vernon L. Smith & Charissa P. Wellford, 2000. "Dividend timing and behavior in laboratory asset markets," Economic Theory, Springer, vol. 16(3), pages 567-583.
  11. Ackert, Lucy F. & Charupat, Narat & Deaves, Richard & Kluger, Brian D., 2009. "Probability Judgment Error and Speculation in Laboratory Asset Market Bubbles," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 44(03), pages 719-744, June.
  12. Steven Tucker & Charles Noussair & Stefan Palan, 2013. "A Review Of Bubbles And Crashes In Experimental Asset Markets," Journal of Economic Surveys, Wiley Blackwell, vol. 27(3), pages 570-588, 07.
  13. Cheung, Stephen L. & Palan, Stefan, 2011. "Two heads are less bubbly than one: Team decision-making in an experimental asset market," Working Papers 2011-08, University of Sydney, School of Economics.
  14. Martin Dufwenberg & Tobias Lindqvist & Evan Moore, 2005. "Bubbles and Experience: An Experiment," American Economic Review, American Economic Association, vol. 95(5), pages 1731-1737, December.
  15. Jürgen Huber & Michael Kirchler, 2012. "The impact of instructions and procedure on reducing confusion and bubbles in experimental asset markets," Experimental Economics, Springer, vol. 15(1), pages 89-105, March.
  16. Vivian Lei & Filip Vesely, 2009. "Market Efficiency: Evidence From A No-Bubble Asset Market Experiment," Pacific Economic Review, Wiley Blackwell, vol. 14(2), pages 246-258, 05.
  17. Volodymyr Lugovskyy & Daniela Puzzello & Steven Tucker, 2011. "An Experimental Study of Bubble Formation in Asset Markets Using the Tâtonnement Trading Institution," Working Papers in Economics 11/07, University of Canterbury, Department of Economics and Finance.
  18. Ackert, Lucy F. & Kluger, Brian D. & Qi, Li, 2012. "Irrationality and beliefs in a laboratory asset market: Is it me or is it you?," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 278-291.
  19. Ernan Haruvy & Charles N. Noussair, 2006. "The Effect of Short Selling on Bubbles and Crashes in Experimental Spot Asset Markets," Journal of Finance, American Finance Association, vol. 61(3), pages 1119-1157, 06.
  20. Lei, Vivian & Noussair, Charles & Plott, Charles R., 2002. "Asset Bubbles and Rationality: Additional Evidence from Capital Gains Tax Experiments," Working Papers 1137, California Institute of Technology, Division of the Humanities and Social Sciences.
  21. Van Boening, Mark V. & Williams, Arlington W. & LaMaster, Shawn, 1993. "Price bubbles and crashes in experimental call markets," Economics Letters, Elsevier, vol. 41(2), pages 179-185.
  22. Sheryl B. Ball & Charles A. Holt, 1998. "Classroom Games: Speculation and Bubbles in an Asset Market," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 207-218, Winter.
  23. Vernon L. Smith, 1965. "Experimental Auction Markets and the Walrasian Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 73, pages 387.
  24. Reshmaan N. Hussam & David Porter & Vernon L. Smith, 2008. "Thar She Blows: Can Bubbles Be Rekindled with Experienced Subjects?," American Economic Review, American Economic Association, vol. 98(3), pages 924-37, June.
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