Equilibrium Dominance in Experimental Financial Market
AbstractWe examine the predictive power of equilibrium dominance in experimental markets where firms with investment opportunities have an informational advantage over potential investors and are permitted to purchase a money-burning signal. Equilibrium dominance often fails to predict well when a Pareto-superior sequential equilibrium is also available. Instead, equilibrium selection appears to be related to the potential earnings of a more valuable firm that can signal its type successfully by defecting from the sequential equilibrium. Potential investors formulate their bids for firm equity based primarily on expectations formed adaptively in response to signaling choices made by firms. Article published by Oxford University Press on behalf of the Society for Financial Studies in its journal, The Review of Financial Studies.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by University of Guelph, Department of Economics and Finance in its series Working Papers with number 1992-05.
Length: 33 pages
Date of creation: 1992
Date of revision:
economic equilibrium ; prices;
Other versions of this item:
- Cadsby, Charles Bram & Frank, Murray & Maksimovic, Vojislav, 1998. "Equilibrium Dominance in Experimental Financial Markets," Review of Financial Studies, Society for Financial Studies, vol. 11(1), pages 189-232.
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Potters, J.J.M. & Sefton, M. & Vesterlund, L., 2005.
"After you - endogenous sequencing in voluntary contribution games,"
Open Access publications from Tilburg University
urn:nbn:nl:ui:12-171671, Tilburg University.
- Potters, Jan & Sefton, Martin & Vesterlund, Lise, 2005. "After you--endogenous sequencing in voluntary contribution games," Journal of Public Economics, Elsevier, vol. 89(8), pages 1399-1419, August.
- Potters, J.J.M. & Sefton, M. & Vesterlund, L., 2003. "After You - Endogenous Sequencing in Voluntary Contribution Games," Discussion Paper 2003-98, Tilburg University, Center for Economic Research.
- 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, 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.
- 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).
- Cadsby, Charles Bram & Maynes, Elizabeth, 1999. "Voluntary provision of threshold public goods with continuous contributions: experimental evidence," Journal of Public Economics, Elsevier, vol. 71(1), pages 53-73, January.
- Miglo, Anton & Zenkevich, Nikolay, 2005.
"Non-hierarchical signalling: two-stage financing game,"
1264, University Library of Munich, Germany, revised 2006.
- Anton Miglo & Nikolay Zenkevich, 2006. "Non-hierarchical signalling: two-stage financing game," Working Papers 0603, University of Guelph, Department of Economics and Finance.
- Gautam Goswami & Martin Grace & Michael Rebello, 2008. "Experimental evidence on coverage choices and contract prices in the market for corporate insurance," Experimental Economics, Springer, vol. 11(1), pages 67-95, March.
- Kawagoe, Toshiji & Takizawa, Hirokazu, 2009. "Equilibrium refinement vs. level-k analysis: An experimental study of cheap-talk games with private information," Games and Economic Behavior, Elsevier, vol. 66(1), pages 238-255, May.
- JosÃ© Luis Lima R. & Javier NuÃ±ez E., 2004. "Experimental Analysis of the Reputational Incentives in a Self Regulated Organization," Econometric Society 2004 Latin American Meetings 194, Econometric Society.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephen Kosempel).
If references are entirely missing, you can add them using this form.