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Are You Experienced?

Author

Listed:
  • Shachat, Jason
  • Wang, Hang

Abstract

We evaluate how traders' asset market activities are distributed in time impacts pricing efficiency, volume, and individual portfolio holdings. Through the first controlled experiment on such timing, we find that cohorts who participate in a sequence of three markets in a single experimental session generate more mispricing and bubbles - but the same trade volume and variability in portfolio values - than cohorts whose three markets are spaced a week apart. We further find that experience gained through spaced repetitions, as opposed to massed repetitions, leads to smaller price bubbles when subjects are recruited to a new cohort and participate in a market for a different asset.

Suggested Citation

  • Shachat, Jason & Wang, Hang, 2014. "Are You Experienced?," MPRA Paper 57672, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:57672
    as

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    References listed on IDEAS

    as
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    6. Ernan Haruvy & Yaron Lahav & Charles N. Noussair, 2007. "Traders' Expectations in Asset Markets: Experimental Evidence," American Economic Review, American Economic Association, vol. 97(5), pages 1901-1920, December.
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    Cited by:

    1. Palan, Stefan & Stöckl, Thomas, 2017. "When chasing the offender hurts the victim: The case of insider legislation," Journal of Financial Markets, Elsevier, vol. 35(C), pages 104-129.
    2. Kleinlercher, Daniel & Stöckl, Thomas, 2021. "Thou shalt not trade—An analysis of the violations of no-trade predictions in experimental asset markets," Journal of Behavioral and Experimental Finance, Elsevier, vol. 32(C).

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    More about this item

    Keywords

    Spacing effects; learning; asset market; bubble; laboratory experiment;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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