Experiential Learning of the Efficient Market Hypothesis: Two Trading Games
In goods markets, an equilibrium price balances demand and supply. In a financial market, an equilibrium price also aggregates people's information to reveal the true value of a financial security. Although the underlying idea of informationally efficient markets is one of the centerpieces of capital market theory, students often have difficulties in grasping and accepting that asset prices fulfill this dual role of information revelation and demand-supply aggregation. The author presents two simple classroom games that illustrate the workings of information transmission and aggregation through prices. The games are easy to comprehend, simple to implement, and short. Each game, including classroom discussions, takes about 30 minutes. By the end, students will have an intuitive feel for informational efficiency.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 41 (2010)
Issue (Month): 4 (September)
|Contact details of provider:|| Web page: http://www.tandfonline.com/VECE20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/VECE20|
When requesting a correction, please mention this item's handle: RePEc:taf:jeduce:v:41:y:2010:i:4:p:353-369. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.