Tom Engsted in the Journal of Economic Surveys
'He further states: “But the available research provides no reliable evidence that price declines are ever predictable,”'
Funny, in a bubble experiment price declines are not only predictable, they are guaranteed by the experimenter's instructions to the subjects.
Here are the final results from a classroom asset trading Veconlab experiment I ran. The results are representative.
The red are the predicted trading prices (based on known fundamentals) and the blue are the actual prices. The students know the value of an asset will be zero at the end.
This experiment has been run thousands of times, including with professional traders - same result.
'He further states: “But the available research provides no reliable evidence that price declines are ever predictable,”'
Funny, in a bubble experiment price declines are not only predictable, they are guaranteed by the experimenter's instructions to the subjects.
Here are the final results from a classroom asset trading Veconlab experiment I ran. The results are representative.
The red are the predicted trading prices (based on known fundamentals) and the blue are the actual prices. The students know the value of an asset will be zero at the end.
This experiment has been run thousands of times, including with professional traders - same result.
